Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — SCOTLAND

The Secretary of State was asked—

Oral Answers to Questions — Cashmere Knitwear

Mr. Archy Kirkwood: If he will meet representatives of the Scottish Cashmere Association to discuss current difficulties facing exporters of cashmere knitwear; and if he will make a statement. [70818]

The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald): The Scottish Cashmere Association and the Scottish Borders Studio are providing regular briefing on the problem facing the cashmere industry as a consequence of the current banana dispute, and my right hon. Friend the Secretary of State and his Cabinet colleagues are keeping fully in touch with the situation. The Government are doing everything possible through the European Union to solve this very serious problem, with discussions at the highest levels.

Mr. Kirkwood: Is the Minister aware of the extent of the fear and apprehension felt by cashmere manufacturers at the prospect of 100 per cent. penal tariff duties being imposed on 3 March on cashmere jerseys exported from Scotland to the United States? Unless the threat is removed, hundreds and hundreds of jobs will be lost in south-east Scotland, in addition to the recent losses, as a direct consequence of the American action. Will the Minister redouble his efforts to ensure that a settlement is reached? Will he and the Secretary of State consider using their access to the Prime Minister to try to persuade him to use his good offices and credit with the President of the United States to try to get the threat removed as soon as possible?

Mr. Macdonald: I agree with everything that the hon. Gentleman said about the unfairness of the threat to the cashmere industry. The Government are working with our European partners to try to bring about a positive resolution. We especially deplore the threat to introduce duties in March. The World Trade Organisation has set up a panel to try to adjudicate in the dispute; it is not expected to report until April, and no action should be considered until that has happened, but the Government will certainly continue working with our European partners.

Mrs. Margaret Ewing: I believe that everyone in the House would appreciate the deep

concerns about the implications for the borders, with the concentration of the cashmere industry in that area, but is it not also true that there is an impact elsewhere in the Scottish economy, including in the north-east, where we also have a cashmere industry and the food processing industry is equally under threat? Companies are trying to make their way into the 1999 Christmas market in the United States of America, so it is important that any conflict that affects them negatively is lifted. Will the Minister do everything that he can, not only for the cashmere industry, but for all the industries affected?

Mr. Macdonald: I absolutely agree that it is equally unfair that the dispute should impact on other industries, not only in Scotland but throughout the United Kingdom and the whole of Europe. That is why we are taking the situation so seriously and are working so hard with our European partners to try to encourage a more rational approach from the American Administration so that we can resolve the dispute.

Dr. Liam Fox: The whole House will be aware that the dispute is serious, not only for cashmere, but in a wider trading context. The Minister spoke about our European partners. What contacts has he made directly with his counterparts in the United States, and what contacts has the Prime Minister made with President Clinton on this serious subject?

Mr. Macdonald: As the hon. Gentleman is aware, we are working closely with our European partners. This is a matter in which European member states have to deal collectively with the US Administration, who are in no doubt about the British Government's views and the seriousness with which we take the issue.

Dr. Fox: Has or has not the Prime Minister made direct contact with President Clinton on the subject? We hear a great deal, time and again, about the closeness of their relationship. When President Clinton was in personal trouble, the Prime Minister was there to help him out of the situation. It is not unreasonable to expect our Prime Minister to intervene directly with the President of the United States on an issue that affects an important industry and may have ramifications for other industries in a wider trading context.

Mr. Macdonald: The hon. Gentleman is a noted anti-European, so it is understandable that he does not like the fact that we are working with our European partners to try to resolve the dispute, which affects not only the United Kingdom, but other European Union countries. The only way of resolving it is through direct discussions between the European Union and the American Administration, under the auspices of the World Trade Organisation.

Mr. Menzies Campbell: What does the Minister think would have happened if the United Kingdom had joined the North American Free Trade Agreement, as Conservative Members urged? Is he aware that United States companies have 78 per cent. of the European banana market, compared with the Caribbean's 9 per cent., and that none of the bananas about which


there is a dispute are actually grown in the United States? What does that make him think about the reasonableness of the position adopted by the Americans?

Mr. Macdonald: The right hon. and learned Gentleman makes a fair point. The European Union banana regime is designed to comply with the World Trade Organisation regulations while honouring our commitments to those countries in Africa, the Pacific and the Caribbean with which we have relations through the Lomé agreement. We stand by those commitments.

Oral Answers to Questions — Inward Investment

Mr. Michael Moore: When the concordat on inward investment between his Department and other Departments will be published. [70819]

The Secretary of State for Scotland (Mr. Donald Dewar): Concordats will be discussed and concluded between United Kingdom Government Departments and the Scottish Executive, rather than the Scottish Office. My Department and others continue to undertake sensible preparatory work ahead of those discussions.

Mr. Moore: Many people in my constituency and across the borders will be hoping that the concordats that are drawn up are a vast improvement on the present regime. Much anger is felt in the borders about the way in which Viasystems is closing two profitable plants with the loss of 1,000 jobs and the fact that all the work is being transferred to other parts of the United Kingdom. Despite that, no Government agency has intervened to examine the substantial grants that the company received in other parts of the country at the expense of the borders. Will the Secretary of State accept that it is now time to hold a public inquiry so that we can resolve once and for all the real issues behind that sorry mess?

Mr. Dewar: Of course, I understand the hon. Gentleman's dismay and anger at what happened in the Viasystems case. As he knows, I have discussed it with a number of interests in the borders, including those who have worked in the plant. He is wrong when he says that no attempt has been made to examine what happened and, in particular, the transfer of work to factories in other parts of the country. The Department of Trade and Industry has considered the issue exhaustively with much encouragement from my Department, and we have not found any technical infringement of the rules. It is a sad chapter, but the public inquiry envisaged by the hon. Gentleman would not be the best approach to it.

Mr. Alasdair Morgan: Will the Secretary of State publish the latest draft of the concordat on inward investment and will he tell us whether he intends to have a period of shadow running, as suggested in the guidelines on concordats published in February? If he does, will he consult the other political parties in Scotland before any period of shadow running commences?

Mr. Dewar: I must confess that I have never been clear about what shadow running means. I am not a great shadow runner, or indeed a great runner at all. That is perhaps a personal sadness. I repeat what I have already said: we are

undertaking sensible preparatory work ahead of the discussions. I stress to the House that any agreement about the working guidelines—that is what the concordats are—between the United Kingdom Administration and the Scottish Administration is a matter for discussion between the parties. I would have thought that the Nationalists would welcome that. I notice from The Scotsman yesterday that Mr. Michael Russell—an important SNP apparatchik—was quoted as saying:
The Scottish general election will give the mandate for such agreements to be drawn up between Holyrood and Westminster. To have them drafted beforehand by civil servants, party apparatchiks and political hacks is not acceptable.

Mr. Oliver Letwin: Can the Secretary of State tell the House whether the concordats will, in principle, be subject to judicial review? Does he think that there is much chance that the concordats will emerge by consensus when a senior figure in the SNP is quoted today as saying:
the SNP executive is already made up with a proportion of so-called fundamentalists"?

Mr. Dewar: I am never sure whether "fundamentalist" is a religious or political term, because it has a wide use. I do not wish to interfere in the private problems of the SNP, which have been illustrated by articles in the papers today. The hon. Gentleman makes an important point, but the concordats are ground rules, not legally binding matters. Therefore, I would not expect them to be in court.
On the subject of consensus, I hope that everyone in Scottish politics will have the best intentions for the running of the new Administration and their relations with the United Kingdom. We all want to see the system work and I hope that it will be approached in a consensual manner. Even if differences arise, I hope that they will be discussed and settled amicably.

Oral Answers to Questions — Health Care (Glasgow)

Mr. David Marshall: If he will make a statement about the Government's plans for providing improved health care for the citizens of Glasgow. [70821]

The Parliamentary Under-Secretary of State for Scotland (Mr. Sam Galbraith): The White Paper "Designed to Care" set out the Government's vision for a renewed and better health service in Scotland. Total Government expenditure on health in Glasgow this year has been almost £1 billion. Since we took office, we have announced extra capital of £52 million for a new maternity hospital, a plastic surgery and burns unit and an emergency receiving centre at Glasgow royal infirmary; £10 million capital for a new radiotherapy facility at Gartnavel hospital; £6.2 million to tackle waiting times and £4.7 million to tackle peak admissions over the winter. From 1 July, this will be a matter for the Scottish Parliament.

Mr. Marshall: In thanking my hon. Friend the Minister for that reply, I recall that I have raised this important matter with him at previous Scottish Question Times. I congratulate him on his splendid efforts to tackle the horrific health legacy that he inherited after 18 years of terrible Tory government. However, will my hon. Friend


guarantee that the twin evils of poverty and unemployment are taken properly into account when the tremendous inequalities in health that exist in the city of Glasgow, compared with the rest of Scotland and with the United Kingdom as a whole, are tackled?

Mr. Galbraith: I can give my hon. Friend that absolute assurance. One of the first things that I did when I took over responsibility for the health service in Scotland was to charge it with a new priority to deal with inequalities in health, in terms of both provision and access. As my hon. Friend will know, the White Paper on Scotland's public health recognises for the first time the link between inequality, deprivation and ill health. It proposes specific measures for tackling that problem, the most important of which is the investment of £2.6 billion to change people's life circumstances, such as their lack of jobs and education, and their poor housing and environment. Once that change is in place, we can affect people's life styles and build a healthier Scotland for everyone, and especially for people in deprived areas.

Mr. James Gray: Some £45 million has so far been spent by the Government to reduce the absolute numbers on waiting lists in Scotland. However, will the Minister explain why, in my native city of Glasgow—[Interruption.] Hon. Members may laugh, but I was born in Glasgow and lived there until I was 21. It is very much my native city and, like the Secretary of State, I am a graduate of Glasgow university. Will the Minister explain why, when he came to power, only one person on the waiting list in Glasgow was waiting longer than 12 months, whereas, after a year, there were 348 people on the waiting list?

Mr. Galbraith: The hon. Gentleman clearly does not keep himself up to date. For the past three quarters, no one on the waiting list has been waiting for more than 12 months. He will also be aware that waiting lists in Scotland now total 78,500 people. That total is significantly lower than what we inherited and is the lowest this decade.

Mr. John Maxton: Does my hon. Friend agree that one of the health problems facing the citizens of Glasgow is the high incidence of dental decay, especially among young children, in the most deprived areas of the city? Does he also agree that the best way to solve the problem is to ensure the proper supply of fluoride in the public water system?

Mr. Galbraith: I am grateful to my hon. Friend for raising this matter again. My answer remains the same as that which I have given him previously, and the matter is also dealt with in the White Paper. There are three ways to improve the nation's dental health: although people should reduce their sugar consumption and brush regularly, the most significant factor is to fluoridation of the water.

Oral Answers to Questions — Employment Opportunities

Mr. Dennis Canavan: What steps he is taking to improve employment opportunities in Scotland. [70823]

The Secretary of State for Scotland (Mr. Donald Dewar): The Government are supporting employment growth in Scotland by securing a stable economic environment based on low inflation and sound public finances. From 1 July, this will be a matter for the Scottish Parliament.
Sadly, jobs sometimes go, but jobs are always being created. Seasonally adjusted data from the civilian work force jobs series show an increase of 33,000 in the number of employee jobs in Scotland in the period between June 1997 and September 1998.

Mr. Canavan: Is my hon. Friend aware that, according to International Labour Organisation statistics, unemployment in the United Kingdom fell by 98,000 last year, but that in Scotland it rose by 9,000? That was before the declaration of redundancies at firms such as Wrangler, BP, Kvaerner and Volvo, and at places such as Bishopton. In the Falkirk area alone, more than 1,000 redundancies have been announced in the past month.
When will the Government listen to people in industry who legitimately complain that interest rates and sterling are still far too high? Is it not about time that some senior Ministers were sent to places such as Falkirk to hold high-level crisis discussions with representatives of local people and business to try to devise an urgent action plan to save as many existing jobs as possible, and to attract new jobs through inward investment?

Mr. Dewar: We want to attract as many jobs as we can to Scotland, and to encourage firms already operating in Scotland. I need not tell my hon. Friend that, since January 1998, unemployment in his constituency is down, though marginally so. I accept that there has been bad news in Falkirk, including the Wrangler closure. However, my hon. Friend will have read of the difficulties in that industry: Levi's for example, is closing half its capacity in America, laying off more than 6,000 people. The industry has significant market problems.
My hon. Friend is right to draw attention to the problems of job creation, but we are creating jobs all over Scotland, and the balance between jobs created and jobs lost tips to the right side. On the ILO statistics, I do not like any reverse gap between us and the rest of the United Kingdom, but the Scottish unemployment rate is well below that of large parts of London, Merseyside, the north-east and other parts of England. A little perspective would be rather more helpful than suggesting that the end of the world is nigh.

Miss Anne McIntosh: Has the right hon. Gentleman assessed the potential impact on employment opportunities in Scotland of a potential loss of objective 1 status for Scotland? Has he assessed the effect of losses in the farming sector through reforms in Agenda 2000? Are the Government likely to take steps to make good any job losses caused by those reforms?

Mr. Dewar: I assume that the hon. Lady made a slip of the tongue in seeming to suggest that Scotland is entirely an objective 1 area. In fact, objective 1 relates only to the highlands and islands. We are keeping the matter on the agenda, fighting hard—with, I hope, her support and that of her hon. Friends—on grounds of gross domestic product per head, on which we narrowly miss


the present criteria. We are also using the Nordic rim and sparsity arguments in doing everything possible to try to retain objective 1 status for the highlands and islands.
The hon. Lady will know that extensive beef production is affected by the shape of what may come from the Agenda 2000 discussions. We are watching matters closely, and Lord Sewel is with the UK delegation, which is united on the importance of the matter. The hon. Lady will realise that enlargement of the European Union and the pressing needs for budgetary stability and agricultural reform are among the difficult problems to be faced.

Mrs. Irene Adams: Does the Secretary of State agree that when areas such as mine—the Paisley postcode area—have lost 90 per cent. of their manufacturing jobs, there is a great need for inward investment? For how many projects has Locate in Scotland been responsible during the past year, and how many jobs will they bring to Scotland?

Mr. Dewar: If I remember correctly, there are 87 inward investment projects. I shall refresh my memory later in case—perish the thought—I am misleading my hon. Friend. Those projects have created a great deal of employment, and have also preserved many jobs. It is encouraging that more good news is likely in future. This week, for example, I visited Dingwall—an area which the hon. Member for Moray (Mrs. Ewing) knows well—to launch a 300-job plant promoted by a French company, Cap Gemini. That is particularly welcome, and there is much mileage in inward investment. Locate in Scotland has an absolutely first-class record and will continue to have the full backing of the Government.

Mr. Donald Gorrie: First, will the Secretary of State consider stopping his present policy and that of his colleagues of blocking the employment opportunities sought by the hon. Member for Falkirk, West (Mr. Canavan) in the Scottish Parliament? On a wider front, will he consider using some of the funds that he has for training to create many hundreds of jobs insulating houses, preventing damp and conserving energy in homes? That is a labour-intensive activity, which would create many real and continuing jobs. It would not cost a great deal, but it would do a huge amount for the housing and health of the Scottish people.

Mr. Dewar: Of course, I do not disagree with the hon. Gentleman about the importance of thermal efficiency and the house insulation programme. I should have expected him to remember that we are in the middle of a large programme of that sort, which involves about 50,000 houses. We certainly intend to work hard on it and I look for further progress. As he knows, we are also using the new deal and the opportunities that it provides to progress that work. It is important that we have job creation constantly in our minds. That is why environmental work, thermal efficiency improvements and the work of Locate in Scotland, which has safeguarded or created nearly 18,000 jobs with the 87 projects to which I referred, are all important and must be progressed to the best of our ability.

Mr. Tom Clarke: In view of the importance for jobs of the Scottish tourism industry, which already employs 175,000 people in a £2.6 billion

industry, does my right hon. Friend agree with Lord Gordon that it is still important for the British Tourist Authority to continue to project Scotland overseas, particularly in view of the advantages of that promotion? Because the authority markets the whole of the United Kingdom, we in Scotland leave the advantage of such marketing from Greenwich to the Grampian, which can only make sense.

Mr. Dewar: I agree with my right hon. Friend that we have to promote Scotland as a tourism centre in every way possible and on every scale. He will know that we have found additional money for the area tourist boards and have increased the funds of the Scottish tourist board overall, perhaps modestly but still significantly. In the area to which he referred, we have found money for Project OSSIAN—a database into which people key—which we hope will make Scotland a more accessible centre for world tourism and underline its great attractions and charms. I am strongly in favour of tourism as an important part of the Scottish economy. I was interested to note that Anne Lorne Gillies—I presume that she was not speaking for her party—a Scottish National party candidate and a member of cabinet told The Northern Times:
Don't depend on tourism, it's only the icing on the cake.
That is rather undervaluing it.

Dr. Liam Fox: When Labour-supporting newspapers such as the Daily Record have such headlines as, "The jobs graveyard", I am sure that it makes the Secretary of State take note. What is it about the Scottish economy that is causing unemployment to rise at present when it is falling in the rest of the United Kingdom? To return to the point made by the Secretary of State's hon. Friend, or, perhaps I should say, the hon. Member for Falkirk, West (Mr. Canavan), apart from the 250 direct job losses at Bishopton, what other jobs will be lost as a consequence of a closure that the Government could prevent if they wanted to?

Mr. Dewar: The hon. Gentleman should look at what is happening and not take the simplistic and populist approach, which I fear is his trademark and does him little credit. That is gentle advice, not a rebuke—I fear that a rebuke would be ineffective. I repeat that there are enormous variations in unemployment in England. It is higher in Merseyside, the north-east and London than in Scotland. I do not like high unemployment. Our unemployment level is, perhaps, not exceptionable compared with the levels that often occurred under Conservative Governments—I point that out merely as a comparison, not an accusation.
Let us consider job creation. Even if one takes out one third of the promised jobs to allow for a shortfall, since we came to power we have been still more than in balance—we have a balance on the right side. If the hon. Gentleman is suggesting that things are bad and can only get worse, he should at least look at that perspective and recognise that that is so. I recommend a little more research.

Ms Rachel Squire: From the 10,000 jobs lost at Rosyth and the closure of the Fife coal mines under the previous Government, I and my constituents, like many hon. Members, know only too


well the devastation that unemployment brings to local communities. However, when I visited Rosyth on Friday, at Lexmark I found a buoyant work force of 500 people and heard of plans for expansion and for a further 200 jobs. Does my right hon. Friend agree that Lexmark is an excellent example of successful inward investment; and that it is a good example of the effective partnership that can be developed between a council such as Fife council, Fife Enterprise, Locate in Scotland and the Scottish Office? Will he say what other such projects currently in hand in Scotland might bring hope and new jobs to communities?

Mr. Dewar: I have no difficulty in agreeing with my hon. Friend about the example she instances, which is important to her and lies within her constituency. New jobs are coming on stream: for example, I was happy to visit Standard Life bank recently, which had no employees 18 months ago, but now has more than 700, and the number is rising rapidly. One can find similar examples throughout Scotland. Like everyone else, we are having a tough time in our manufacturing industry and in some of our traditional industries, but a lot is happening that is good and positive and, as I said, the balance is on the right side.
There are examples of difficulties arising, of which perhaps the best known are Mitsubishi and the problems at Prestwick, but the sort of co-operation which my hon. Friend describes between private industry, Government, local authorities and other interested agencies has fully replaced, or is in the process of fully replacing, the job losses that were experienced. Those two examples are hopeful signs of the times.

Oral Answers to Questions — Scottish Executive

Mrs. Teresa Gorman: What plans he has for a needs assessment to inform decisions on the size of the Scottish block made available to the Scottish Executive. [70824]

The Minister for Home Affairs and Devolution, Scottish Office (Mr. Henry McLeish): The Scottish Parliament's assigned budget for the next three years has been determined as part of the comprehensive spending review. From 1 July 1999, any change to the funding arrangements for the Parliament, including any proposal for a study of Scotland's relative needs, would be the subject of full consultation between the Scottish Executive and the UK Government.

Mrs. Gorman: Will the Minister confirm that the last needs assessment for Scotland was conducted in 1977, under the last Labour Government, since when per capita income in Scotland soared under the Conservative Administration; and that per capita income in Scotland is now equal to that in England? Does he agree that, when the next needs assessment is considered, there will no longer be any excuse for English taxpayers having to subsidise Scotland to the tune of £1,000 for every man, woman and child in Scotland? There are needy areas in the south-west, Cornwall and the north-east, parts of London that currently languish under Labour management, and even parts of my constituency in Basildon where we could do with that money and where, I put it to him, the money could legitimately be directed.

Mr. McLeish: It is a pity that the House continues to hear such tired old arguments about devolution and the

state of public finances in the United Kingdom. We have a settled system that is fair and provides stable finances throughout the whole of the United Kingdom. We believe that there is no need for a needs assessment, but, as I said, if that happens in future, there will be close consultation between the UK Government and the new Scottish Executive.
That said, comments such as the hon. Lady's are about attacking devolution. I should have hoped that the issue would be put to rest by now, because all parties in the House now support that proposition. Let me tell the House what is important in Scotland: £4 billion of new money is being spent over the next three years, of which £1.8 billion will be spent on health and £1.3 billion on education. That is what my constituents want and I am sure that it is what the House wants as well.

Mr. Ernie Ross: Does my hon. Friend agree that it seems passingly strange that, on the one hand, the Tories are saying that we are spending too much and, on the other hand, the other right-wing party in Scotland, the Scottish National party, is saying that we are spending too little? Does my hon. Friend believe that the commitment given in the devolution White Paper that the Barnett formula will not be changed without a full assessment of Scotland's relative needs, together with the comprehensive spending review—which gives £1.8 billion extra for health and £1.3 billion extra for education—are the right policies to follow?

Mr. McLeish: I agree entirely with my hon. Friend. This is a stable settlement which provides something that is fair to the United Kingdom and to Scotland. My hon. Friend has highlighted the fact that, on the one hand, the SNP argues that the Barnett formula undermines the Scottish settlement, while, on the other hand, the Conservatives argue that Scotland is getting too much. They are both simply wrong. It is a fair settlement which should be supported.

Mr. John Swinney: Before a needs assessment is carried out, is the Minister at all concerned about the fact that education and health spending in Scotland is increasing at a slower rate than in England and Wales as a result of the comprehensive spending review? As a consequence, does he not realise that the statement that he has just made and the comments by the hon. Member for Dundee, West (Mr. Ross) are ludicrous because they reveal no understanding of the real impact of the Barnett formula on public finances in Scotland?

Mr. McLeish: It is no surprise or secret that spending levels are 20 per cent. higher per capita in Scotland. What is the SNP arguing? Is it arguing that Scotland is getting too much from Barnett and that the percentage is too high, or that it will spend more money and offer Scots a new future? The SNP cannot get away with that because it simply does not understand the finances: it is living in an economics fantasy world. Scots clearly want investment in real projects, and £4 billion in new money has been provided. The SNP cannot compete with that and the Tories want to undermine it, but ours is the correct way forward.

Oral Answers to Questions — Medical Care (Elderly People)

Dr. Norman A. Godman: When he last met the chairmen of health boards to discuss matters relating to the medical care of elderly people. [70825]

The Parliamentary Under-Secretary of State for Scotland (Mr. Sam Galbraith): I meet representatives of health boards and national health service trusts regularly to discuss matters of current interest, including matters relating to the medical care of elderly people.
From 1 July 1999, this will be a matter for the Scottish Parliament.

Dr. Godman: Before it becomes a matter for the Scottish Parliament, dare I remind my hon. Friend that two problems affecting the medical treatment of the elderly relate to bed blocking—in all its faulty definitions—and medical examinations? What guidelines are given to general practitioners about the annual medical examinations that people of 75 years and above receive? Are those elderly people expected to skip down to the surgeries or are allowances made for their infirmity? How comprehensive are those examinations of the elderly?

Mr. Galbraith: I assure my hon. Friend that allowances are made for general practitioners to visit elderly people in their homes in order to conduct examinations. The general practitioners are under an obligation either to invite elderly people to their surgeries or to conduct home visits. They carry out full examinations which assess the needs of the individual and then decide what matters should be pursued.

Mr. Andrew Lansley: When examining issues of long-term care for the elderly, I am sure that the Minister will wish to have regard to the royal commission's report on that subject. Can the Minister shed some light on why that commission—which the House was promised would report within 12 months after 4 December 1997—has not reported yet?

Mr. Galbraith: I hope that the hon. Gentleman will agree that it is important to get such reports correct rather than to get them early. I trust that that has been the motivating factor for the royal commission.

Mr. James Wray: Will the Minister tell the House why he has been pontificating about the fluoridation of the public water supply? Does he realise that he could be in breach of the Food and Drugs (Scotland) Act 1956, the Medicine Act 1968 and the Water Act 1945? Will he tell the House what doctor provides treatment to patients whom he never sees?

Mr. Galbraith: As many of my colleagues will know, my hon. Friend and I have had many jousts on this matter, in public and in private, and I am grateful to him for continuing the debate. He is looking a bit the worse for wear for it. We must take the most significant public measure possible to help my hon. Friend's constituents, and we must remember that this is an issue for his constituents more than anyone else. I know that he lives not in his constituency, but rather in a well-off place—but we must think about his constituents.

Oral Answers to Questions — Livestock Industry

Mr. Owen Paterson: If he will make a statement on the Scottish livestock industry. [70827]

The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald): The Scottish livestock industry is working to recover from blows that have affected its performance in recent years. The Government are providing a record amount of aid to farming in Scotland—almost £500 million—and since taking office we have provided an extra £82 million of targeted special aid to the livestock sector. We also made the breakthrough in getting the EU beef export ban lifted via the date-based export scheme.
From 1 July, this will be a matter for the Scottish Parliament.

Mr. Paterson: I thank the Minister for that reply. I recently talked to a major exporter of high-quality Scottish beef in Inverurie who said that, until the ban on beef on the bone is lifted, his business of exporting top-quality roasts to Italy, France and Belgium cannot be restarted. Therefore, no serious meat concern in Scotland will go to the considerable expense of dedicating an entire abattoir to export business. Last year, the risk of getting new version Creutzfeld-Jakob disease was one in a billion; this year, it is lower. When on earth will the Government apply common sense to the issue?

Mr. Macdonald: It was the previous Government, of whose party the hon. Gentleman is a member, who caused the export ban to be imposed in the first place. We have made progress—the date-based export scheme was agreed in November and we shall shortly host a visit from the Commission to study the details of the scheme and to inspect premises. After that, we shall need to work hard to relaunch the export industry successfully. I am sure that there is a market for Scottish and British beef, and we need to work hard to ensure that we win that market.

Sir Robert Smith: Will the Minister assure the livestock industry that, if national envelopes are introduced as a result of the negotiations on Agenda 2000 and reform of the common agricultural policy, the Government will use all the money in the national envelope to benefit agriculture?

Mr. Macdonald: I cannot anticipate the outcome of the negotiations. As my right hon. Friend the Secretary of State said, Lord Sewel, the Minister responsible for agriculture, is in Brussels and engaged in discussions on Agenda 2000. Current proposals would be a step in the right direction, but we need to do much more work to ensure that they are fair to British farming, including the Scottish industry.

Oral Answers to Questions — Housing

Mr. Ian Davidson: If he will make a statement on the development of community ownership of housing in Glasgow. [70828]

The Secretary of State for Scotland (Mr. Donald Dewar): Glasgow city council is currently conducting a feasibility study of options for the possible transfer of the council's housing stock into community ownership.
From 1 July, this will be a matter for the Scottish Parliament.

Mr. Davidson: I welcome any prospect of additional money for Scottish housing in general and Glasgow in particular. I welcome also the Government's enthusiasm for the community ownership of housing. Does the Secretary of State agree, however, that it is important that any new tenants who go into community housing do so willingly and do not feel that they have been bribed or bludgeoned into doing so?
Does my right hon. Friend accept that, if there is to be any new money for Scottish housing, that money should be available whatever the result of any ballots about transfer of ownership, whether people choose to stay with the local authority, go to community housing or go somewhere else? Does he agree that it is essential that there are no rigged ballots for disposing of Scottish housing in future?

Mr. Dewar: I do not accept the implication that there have been rigged ballots. "Rigged" is a rather serious word to use. I am glad that my hon. Friend welcomes the emphasis on community ownership. It is an exciting initiative. It is only one option open to local government, which is at the absolute centre of the housing partnerships on which we are working.
I stress that not only does a local authority have to agree before a community ownership scheme can be set up, but the decision must be endorsed by tenants. It is important that any ballot is conducted on the basis of full information so that tenants have the opportunity to assess exactly what kind of tenancy agreement and rent policy would result. I am interested not in railroading anyone into that decision, but in taking an exciting new approach to housing and providing an opportunity to deal with the problem of residual debt, while involving tenants in managing their own affairs.
I am sure that my hon. Friend will take pleasure—as I have—in the enormously positive response of the Scottish Federation of Housing Associations, the Convention of Scottish Local Authorities, Shelter and many other organisations to the recently published Green Paper.

Oral Answers to Questions — LORD CHANCELLOR'S DEPARTMENT

The Minister of State was asked—

Oral Answers to Questions — Magistrates Clerks

Mr. John M. Taylor: When he last discussed with the Association of Magisterial Officers the qualifications required of a clerk to a magistrates court. [70849]

The Minister of State, Lord Chancellor's Department (Mr. Geoffrey Hoon): I last spoke with the Association of Magisterial Officers about qualifications for court clerks on 14 January 1999.

Mr. Taylor: Does the Minister mind telling the House, on the matter of the solicitor's qualification, why a clerk of a magistrates court should need to be trained and examined in conveyancing, probate, wills and trusts?

Mr. Hoon: I had thought that the policy of the previous Administration was in favour of requiring magistrates

court clerks to be legally qualified, and that is the answer to the hon. Gentleman's question. It is important that those giving legal advice to magistrates are legally qualified.

Mr. David Kidney: I congratulate my hon. Friend on the concession that he made to allow clerks over 40 years of age to continue in their job without obtaining the qualification, and I congratulate him on the fact that he has put in place the training of non-qualified clerks so that they can obtain the qualification. Having said all that as his friend, may I ask him once more about the question of certificates of competence for those who have not attained the age of 40 but have done the job for many years and have thereby proved their competence? Why should they be obliged to obtain another qualification if they can already receive a certificate, as suggested by the Justices' Clerks Society, for one?

Mr. Hoon: I am grateful to my hon. Friend for his observations, but there is no suggestion that there is any criticism of the competence of those giving legal advice. However, it is important that we achieve a fully professional service to meet the challenges facing magistrates courts today and those that they are likely to face in future. The difficulty is that, if we exempt the great majority of those in post at present, it will take until at least the fourth decade of the next century to achieve the legal qualification.

Oral Answers to Questions — Legal Aid Board

Mr. Simon Burns: If he will make a statement about the financial efficiency of the Legal Aid Board. [70850]

The Minister of State, Lord Chancellor's Department (Mr. Geoffrey Hoon): The grant allocated for the Legal Aid Board's administration costs is determined with reference to a business plan, which sets out performance targets for processing the board's business under the legal aid scheme. In the financial year 1997–98, the board's unit costs fell by 1.7 per cent.
The Access to Justice Bill will reform legal aid and replace the Legal Aid Board with a Legal Services Commission, which will develop the managerial and strategic systems to implement the new legal aid arrangements and monitor them in future.

Mr. Burns: Does the Minister agree that one way of improving the financial efficiency of the Legal Aid Board would be for the Minister to reform the system to stop the ludicrous position—which is affecting some of my constituents—whereby a European Union national or anyone from outside the EU can come to this country and immediately qualify for legal aid, whereas most British citizens cannot travel the world and get free legal services in other countries at their taxpayers' expense? Does the Minister agree that it is time that this nonsense was stopped?

Mr. Hoon: As the hon. Gentleman knows, the Government are engaged in a significant reform of the legal aid scheme. However, I must tell him that reciprocity in the availability of legal aid with other European Union countries actually works to the advantage


of citizens of the United Kingdom, because they benefit from legal advice and help when they go to other EU countries. There is also a consideration under the European convention on human rights, as it is important that those appearing before our courts, of whatever nationality, have access to legal representation.

Jacqui Smith: Last week I was able to visit and see the excellent work of the Redditch citizens advice bureau, and I was impressed by the potential that exists there for providing accessible legal advice to my constituents. Can my hon. Friend assure me that, in the legal aid reforms, the Government will not only keep control of current expenditure on legal aid, but ensure that a larger proportion is made available to provide legal advice in areas such as citizens advice bureaux and law centres—and widen the ambit of legal aid to cover areas, such as welfare benefits, that currently are not covered?

Mr. Hoon: I am grateful to my hon. Friend for her observations. She and I were elected on a manifesto that pledged to create a community legal service. It is precisely the Government's intention to get the existing legal aid scheme under control to provide resources to fund a community legal service that will give help to the most disadvantaged in our society.

Mr. John Burnett: The Government believe that the introduction of conditional fee agreements will substantially reduce the legal aid budget. They also believe that that will open up access to justice to middle-income Britain. Will the Minister tell the House whether, under conditional fee agreements, the costs of successful plaintiffs—whether they be the uplift in cost, disbursements, experts' fees and insurance premiums, if they are affordable and available—will be recoverable on a full indemnity basis?

Mr. Hoon: Subject, obviously, to the approval of the House, the Access to Justice Bill specifies that a successful plaintiff, under a conditional fee agreement, would be able to recover both an insurance premium and the success fee from the unsuccessful defendant.

Mr. Edward Garnier: Under the Minister's plans, the only money that will be left for civil legal aid will be what is left over after the requirements of criminal legal aid have been met. If that is what he intended when he introduced his reforms, why did he not say so 18 months ago, or is this just another example of his failure to give attention to detail?

Mr. Hoon: It is clear that the proposed criminal defence service and the proposed community legal service budgets are separate, but those budgets are set with an expenditure settlement that is settled for the next three years. In that context, proposals to ring-fence one or both budgets would not be realistic. All services funded by the Government are funded by the taxpayer and the Government must be free to consider competing priorities for the finite resources that are available.

Oral Answers to Questions — Stow-on-the-Wold Magistrates Court

Mr. Geoffrey Clifton-Brown: What representations he has received regarding an appeal against closure of the magistrates court in Stow-on-the-Wold, Gloucestershire. [70851]

The Minister of State, Lord Chancellor's Department (Mr. Geoffrey Hoon): I have now received three representations from local interested parties following Gloucestershire magistrates courts committee's decision to close the Stow-on-the-Wold magistrates court with effect from 1 July 1999.

Mr. Clifton-Brown: The Minister will be aware that the magistrates courts in Tewkesbury and in Chipping Campden have already been closed. That means that huge swathes of north and east Gloucestershire will be without a magistrates court, which will involve my constituents having to travel distances of well over 20 miles, even though the bus service is virtually non-existent. Is not that the quickest way to alienate constituents in rural areas from the summary justice system?
Will the Minister consider an appeal from Gloucestershire county council against that ludicrous decision by the Gloucestershire magistrates courts committee, which will save only £7,000 a year? The decision is utterly ridiculous—so will he overrule it?

Mr. Hoon: Each of the decisions to which the hon. Gentleman refers was taken locally—they were certainly taken by the local magistrates courts committee—and, I suspect, involved his own constituents. In respect of the particular appeal concerning the Stow-on-the-Wold magistrates court, as he will know, the appeal process has only just begun. Those involved in each part of the appeal will be given an opportunity to present their case and comment on the case made by the other side. A decision will not be made until both parties have confirmed that their cases are complete.

Oral Answers to Questions — Legal Aid Budget

Mr. John Bercow: If he will make a statement on the legal aid budget for 1999–2000. [70853]

The Minister of State, Lord Chancellor's Department (Mr. Geoffrey Hoon): Legal aid provision for 1999–2000 is £1.63 billion. Of that, the Government expect to spend approximately £850 million on criminal cases and £780 million on civil and family legal aid.

Mr. Bercow: I am grateful to the Minister for that reply. Given that the number of firms providing legal aid services is set to fall, as a direct result of Government policy, from 10,600 to only 3,000, why does he not understand that firms with block contracts to act in either the civil or the criminal courts are anxious for some reassurance about what will happen after the first round of contracts has been concluded under his Access to Justice Bill?
Will the Minister accept that, unless some such reassurance is forthcoming, people will inevitably conclude that the Government are hellbent on cutting costs, whatever the sacrifice in the quality of service or in access to justice?

Mr. Hoon: I want to make it clear to the House that no decision has yet been taken on precisely how many


solicitors will be granted contracts. However, the hon. Gentleman's conclusion is wrong. The whole purpose of franchising and providing contracts is to ensure that members of the public have access to specialists. Indeed, those who are eligible for franchises and contracts will be high-quality solicitors who specialise in particular areas. That will ensure access to justice; it will also ensure that ordinary members of the public have the best-quality service.

Charlotte Atkins: Is it not the case that some lawyers are getting rich at the expense of the legal aid budget, while profit-free services such as citizens advice bureaux and law centres suffer?

Mr. Hoon: Certainly, that is part of the underlying reason why the Government intend to create a community legal service, as I said in answer to my hon. Friend the Member for Redditch (Jacqui Smith) earlier. The community legal service will be able to concentrate help where it is most needed, especially among the most disadvantaged in our society.

Oral Answers to Questions — Legal Aid (Personal Injury Cases)

Mr. Nick St. Aubyn: If he will make a statement on the effects of his Department's plans to withdraw legal aid in personal injury cases. [70854]

The Minister of State, Lord Chancellor's Department (Mr. Geoffrey Hoon): The Government are determined to ensure that the best use is made of taxpayers' money used to fund legal services. We see no reason to use taxpayers' money where other suitable forms of funding exist. The vast majority of personal injury cases are suitable for funding through a conditional fee agreement and at least 50,000 such agreements have already been made. However, cases with exceptionally high investigative or overall costs, or that raise issues of public interest, may continue to receive help from public funds. Moreover, there are no present plans to remove from that scope cases of personal injury caused by clinical negligence.

Mr. St. Aubyn: Does that answer not demonstrate mean-mindedness, because the costs of claims are often recovered through successful prosecutions and are therefore extremely small? Does it not also show shortsightedness, because in personal injury cases, where individuals' life chances have been destroyed, those without the money to pursue their case will no longer be supported by the state and, as a result, will become a burden on the state, costing the Exchequer many more pounds in the future?

Mr. Hoon: Unfortunately, the statistical evidence does not bear the hon. Gentleman out. If the House will forgive

me, I shall set out some figures that will instruct him and perhaps assist him in formulating his arguments in the future. In 1996–97, some 83,000 personal injury cases were funded by legal aid. Of those, nearly 12,000 were clinical negligence cases, which will remain within the scope, but, of the remaining cases, more than 81 per cent. cost £4,000 or less. That was the total cost for the case, including counsel's fees. Those disbursement costs are not beyond the means of a typical solicitor, who could fund those up-front costs to the benefit of his or her clients.

Ms Beverley Hughes: Does my hon. Friend agree that lawyers in personal injury practice constantly come across people who cannot afford to pursue personal injury cases precisely because they are not eligible for legal aid? Would not moving to a conditional fee arrangement open up the courts to those with genuine claims who cannot pursue them now because they are of modest means but just above the limit for legal aid?

Mr. Hoon: My hon. Friend is right. At present, many people cannot afford to fund legal cases themselves, but are not so poor that they qualify for legal aid. The success of the arrangement demonstrates that the large number of people in the middle can gain access to justice as a result of the conditional fee agreements.

Oral Answers to Questions — Rural Magistrates Courts

Mr. Desmond Swayne: If he will make a statement on his policy on the closure of rural magistrates courts. [70855]

The Minister of State, Lord Chancellor's Department (Mr. Geoffrey Hoon): The Government's policy is that the administration of magistrates courts is best decided locally, consistent with the provisions of the Justices of the Peace Act 1997—legislation that we inherited from the previous Government. A local authority that contributes financially may appeal to the Lord Chancellor against a proposed closure. The procedure for such appeals is also set out in section 56 of the 1997 Act. In the absence of an appeal, the Lord Chancellor plays no part in the process.

Mr. Swayne: Magistrates courts are not volunteering for closure: these closures are a consequence of the Minister's policy. How many rural magistrates courts have closed since the hon. Gentleman took up his responsibilities?

Mr. Hoon: The hon. Gentleman is right so suggest that magistrates courts are not volunteering for closure. The local magistrates courts committees, which are responsible for them, are taking those decisions.

Economic and Monetary Union

The Prime Minister (Mr. Tony Blair): With your permission, Madam Speaker, I should like to make a statement.
On 27 October 1997, my right hon. Friend the Chancellor of the Exchequer set out the Government's policy on the European single currency. He said that he would publish details of how, should it choose to do so, Britain could join the euro. That became known as the national changeover plan. Today, we publish an outline of that plan as a basis for consultation.
I should like to thank the standing committee set up by the Chancellor to oversee preparatory work on monetary union across the economy. I am most grateful to the Governor of the Bank of England, the heads of the Financial Services Authority and the British Bankers Association, the presidents of the Confederation of British Industry and the British Chambers of Commerce and the general secretary of the Trades Union Congress for their contribution to this work. It has been a truly co-operative effort involving an unprecedented partnership between the public and private sectors. I am particularly pleased that the standing committee welcomed our intention to produce the outline plan that we are publishing today.
In his statement of October 1997, the Chancellor made clear the Government's view that membership of a successful euro would bring benefits to Britain in terms of jobs, investment and trade. He said that, in principle, the Government were in favour of Britain joining a successful single currency, and he set out the conditions necessary to satisfy our national economic interest.
Our intention is clear: Britain should join a successful single currency, provided the economic conditions are met. Our membership is conditional; it is not inevitable. Both intention and conditions are genuine. We believe that it is the right course for the country to resolve this issue for the British national interest, the future of our people and their well-being. It is that national interest that will always come first.
I do not dismiss the constitutional or political issues. They are real. Monetary union is a big step of integration, but so were the Single European Act and the European Union itself. In finance and business, the world is more and more integrated. It is moving closer together. If joining a single currency is good for British jobs and British industry, and if it enhances British power and British influence, I believe it is right for Britain to overcome those constitutional and political arguments and the fears behind them. For the very reason of the sensitivity of those arguments, we have also said clearly that the Government can recommend, but the people will decide in a referendum.
What we announce today is not a change of policy: it is a change of gear. If we wish to have the option of joining, we must prepare. The sheer nature, scale and complexity of the arrangements require considerable time for such preparation. Joining the euro is, for example, far more detailed in its consequences than decimalisation. If we do not start to face this reality now, we will simply not have the practical means necessary to make a choice.
There are those, on the Opposition Benches and elsewhere, who oppose the very idea of a national changeover plan. We can no longer afford to pretend

either that the euro does not exist or that Britain should not actively prepare for it. Such a denial of reality does not promote Britain's interests; it betrays Britain's interests.
The euro is a reality. It exists. Eleven out of 15 other European Union members are in it. It represents 20 per cent. of world income—as big as the United States. It will be the currency of 290 million people.
The euro has begun and, on the whole, it has begun well. Of course, these are early days. There will be tests and strains ahead, but the launch was successful. Those who predicted that it would never happen or would launch itself in disaster have been proven wrong. And it will have a major impact on Britain, in or out: that much is obvious. That alone would rebuke those who would like to pretend that it is not there.
Fifty per cent. of our trade is with the euro zone. The launch of the euro means that an increasing number of UK firms are already starting to use the euro—and not just big business such as British Steel, Ford, Philips, ICI and Unilever; surveys by the Treasury's euro preparations unit show that some 45 per cent. of small and medium-sized enterprises in the UK have trading links with Europe, and they are already having to prepare to deal with the euro. The same surveys showed that nearly half all SMEs thought that the single currency would affect their business. Last autumn, some 14 per cent. of SMEs were already planning to use the euro, and the latest survey by APACS—the Association for Payment Clearing Services—shows that 247,000 companies intend to open euro accounts. Eighty-six per cent. of large retailers have suppliers in the euro zone, and 44 per cent. say that they are planning to pay euro zone suppliers in euros from this year. The euro, therefore, is now an everyday reality for British business, large and small.
When we came to office, we took immediate steps to help the country to prepare. Since the Chancellor's statement, the Treasury has run a major information and direct mail campaign for the 1.6 million small businesses in the UK. Some 350,000 copies of the Treasury's business fact sheets have been distributed, and there have been 750,000 requests for the fact sheet leaflet. We have established 12 regional euro forums across the UK, led by senior business people, who are making preparations at local level.
Firms can now pay taxes, file accounts, issue and redenominate shares, and receive certain grants in euros, and Customs and Excise has trained some 10,000 staff to respond to business needs. Small businesses will have the help that they need. The City of London is prepared, and is already taking a good share of euro-denominated business.
These, however, are all preparations for the euro with Britain, at present, out of that single currency. It is also necessary now to prepare for Britain being part of it. If, as we have already announced, we want to keep open the option of making a decision early in the next Parliament to join, we need to step up our practical preparations now; hence the national changeover plan.
The public sector will give a clear sign of its commitment to prepare. Each Department now has a Minister responsible for euro preparations, and each will now report regularly on the preparations that are being made. Where computer systems are being upgraded, all Departments will build in euro compatibility where that


represents value for money. In the case of the Department of Social Security, the Inland Revenue and Customs and Excise, the scale and complexity of their computer systems make advance preparations critical. Together, those Departments are the main interface between central Government and the business community, and deal with almost every individual in the UK. They may need to spend some money prior to a referendum to make their information technology systems euro compatible, so that we can maintain the flexibility for Britain to make the changeover as quickly and cost-effectively as possible.
It is right that Parliament should be asked to give explicit approval to such expenditures, which will amount to some tens of millions of pounds spread over a number of years. We will therefore include provisions in the Finance Bill and the Social Security Bill that will authorise the spending—and, of course, there will be the normal votes on the appropriation accounts. The Government will be making active preparations for the euro, in the belief that it will be in this country's interests to join in the future should our economic tests be met. Business should start to do the same.
The national changeover plan sets out the range of work involved for different sectors. For example, in the retail financial sector, the British Bankers Association and APACS are leading work with the Bank of England on how to approach the conversion of their core IT systems. The retail sector more generally will be working, with consumers and suppliers, on a detailed code of practice on arrangements for the changeover. Businesses, large and small, need to focus on the impact of the euro on their business strategies.
On the basis of that work, and after studying the experience of the first wave of participants, the outline plan that we are publishing today shows that it is possible to streamline the timetable adopted in Europe, with no disadvantage to our economy and some benefit. Overall, we believe that it should be possible to move in four months, from a Government decision to a referendum; and, in 24 to 30 months, from a positive referendum result to the introduction of notes and coins. It would be a further six months before sterling notes and coins were withdrawn.
Therefore, the whole process—from a positive referendum result to the withdrawal of sterling—could be completed in about three years, which is considerably faster than the period required for the first wave of monetary union participants. However, a great deal of further work must be done to refine and develop the timetable, and particularly to clarify how soon after a positive referendum result we could actually join monetary union. As the plan makes it clear, we are committed to taking that work forward in collaboration with business and the wider public sector, so that we can produce a further plan in about a year's time.
As for the economic tests that the Chancellor established on 27 October 1997, there is much focus—which is entirely natural—on the politics of the euro project. It is, of course, an intensely political act. However, just as the euro cannot be conceived of except politically, it cannot be made to work except economically. It is, after all, an economic union.
We have, as a Government, resolved the political issues in favour of the principle of joining, should the economic tests be met. But they must be met. The manner in which

we joined the exchange rate mechanism is a standing monument to the danger of joining a monetary arrangement on purely political grounds.
There are, therefore, two ideological and absolute positions on the euro which I do not share. The first is that of "no, never", which rules out Britain's membership of the euro for always on the ground of constitutional principle. The position is perfectly principled and argues—no matter what the benefits in jobs, industry or even influence—that such a decision is simply wrong, on the ground of sovereignty.
I cannot accept that position, for the reasons that I gave earlier. In the modern world, one has only to look around to see that technology, global finance, mass communication—to say nothing of travel and culture—are coming together. The world is moving together. Sovereignty pooled can be sovereignty—or at least power and influence—renewed. I suspect that, even if we were today to rule out membership in principle and for ever, in a few years, that ruling would itself come under question. In the meantime, we would have lost all influence whatsoever in the economic future of the European Union, of which we will remain a member.
The second position is an unconditional "yes, now". It maintains that economic conditions are meaningless, and that we should join regardless. I believe that economic conditions are meaningful. It is precisely because the conditions are meaningful that we have said, to give some greater certainty to business and the country, that, barring unforeseen circumstances, we would not make a decision in this Parliament to recommend joining the euro.
It is worth, however, summarising the economic tests that the Chancellor established: sustainable convergence between the UK and countries within the euro zone; flexibility to adapt to change in the UK and in continental Europe; the impact on investment and the UK financial services industry; and whether joining the single currency would be good for employment.
Three points should be emphasised. The first is that economic convergence must not be momentary, but, as far as we can accurately foresee, sustainable. We are still at a different stage of the economic cycle from the rest of Europe. However, the difference between our official interest rates and theirs is narrowing. In October 1997, UK interest rates were at 7 per cent, with those in France and Germany at close to 3 per cent. UK interest rates are now at 5.5 per cent, compared with 3 per cent. for the euro area. The difference between our long-term interest rates and their own also is narrowing, and is now down to about 0.5 per cent. Long-term, UK interest rates are now about their lowest for 40 years. Our inflation performance also is consistent with the European central bank's definition of price stability. However, it is essential that convergence is settled and sustainable. We cannot say that yet.
Moreover, for decades we have been prone to far greater swings in the economic cycle than our continental counterparts. It has been boom and bust. That has enormously damaged investment and reduced our ability to grow without hitting an inflationary ceiling at relatively low levels of growth.
Under this Government, there is an entirely new framework for economic management in place. Bank of England independence has at long last given us credibility in interest rate decisions, as well as low interest rates.


There are also new fiscal rules which the Chancellor has relied on to slash the £28 billion borrowing requirement and ballooning national debt which we inherited and put us on a path of fiscal prudence. The new framework is a revolution in economic management for Britain. On its foundation, we have put in place measures to boost education, skills, technology and productivity, and measures to enhance the ability of business to grow and prosper. However, we need to get through this more difficult part of the economic cycle and emerge stronger. For Britain to join the euro, it must be from a position of sustained economic strength.
The second point is that these are early days for the euro. It is sensible to see how it settles down and how the ECB steers a path consistent with both strong economic discipline and the avoidance of deflation.
Thirdly, it will take some time to make a clear judgment about whether the direction of economic reform in Europe will enable us to meet the tests that we have set out, particularly on flexibility and jobs.
Europe has a choice. Most of the countries in Europe have high and persistent levels of unemployment. The Asian crisis has brought home to all of us in the EU the fragility of the new world of globalisation. Our world economy is more interdependent than ever. The EU is competing not just with itself, but with the whole world from Asia to America. The single currency alone will not make Europe prosperous. The single currency plus fundamental reform in labour, capital and product markets and in our welfare systems can do so.
Economic reform is crucial, not just to the success of Britain's participation in the euro, but to the euro itself. I understand the worries of those who, while not ruling out the euro in principle, are none the less concerned about the type of euro zone that we might be joining. That is a real question. We must be sure that the EU is moving forwards, not backwards. There are real problems in the EU and Britain can play a part in the solution. The economic reform programme includes the action plans that we started at our Cardiff Economic Council. They require labour market reform through greater flexibility, capital market reform through a European venture capital industry and product market reform through extending competition and strengthening the single market. We are determined that these must be in place. [Interruption.]

Madam Speaker: Order. I would be obliged if hon. Members who are conducting running commentaries would desist.

The Prime Minister: It would be better if their running commentaries made any sense.
The way to provide social protection today is not more and more regulation or high business costs and taxes; it is through making our work force highly adaptable, more employable and better skilled, encouraging the development of technology, promoting small businesses and making our welfare systems help people off benefit and into work, with specific measures to combat social exclusion. We need a new social model for a new European reality.
I want a Britain strong, economically disciplined, with boom and bust eradicated, flexible, competitive and dynamic. I want us in a Europe that at best is moving

firmly in the same direction, rather than trying to hold us back. That is a vision that lets us adapt the European social model to the new realities of global commerce; a vision that binds the EU and America closer together and lets us learn from one another.
We have stated today as a matter of Government policy that in principle Britain should join a successful single currency. That principle is real. The practical preparations that we have set out are real. The conditions—necessary so that we proceed with caution, with common sense and in our own interests—are real. We have set out a vision of Europe's future.
We have a vision, but it is a vision that is practical. We should have confidence in Britain, both in our vision and our pragmatism. I commend the statement to the House.

Mr. William Hague: Many of us have listened to many statements, but never have we heard such a long list of clichés and verbiage accompanied by so little information.
It was all so simple for the Prime Minister before the last election. Perhaps he recalls his article in The Sun in April 1997, which appeared under the headline,
My love for £. Exclusive by Tony Blair.
Tony Blair last night declared for the first time he loves the pound.
He admitted:
'I know exactly what the British people feel when they see the Queen's head on a £10 note. I feel it too.'
[Interruption.] He did not think it was a joke at the time. There were, he said,
emotional issues involved in the single currency",
and he spoke about his passion for the pound. Has it not been a remarkably short journey from this love of the pound to the plan that he is announcing today to adopt the euro and abolish the pound? Has not the Prime Minister today committed the country to a course of action that is unnecessary, expensive and time consuming, and for which the British voters have never given their consent?
The Prime Minister must know that, if Britain joins the single currency, we risk being unable to run the British economy in the interests of British business. We also risk fundamental political powers—such as the power to tax and spend—being transferred away from democratically accountable British Governments. He must know that there is no sign of the British economy becoming permanently convergent with continental economies. The evidence that he just claimed to give could be equally given for the dollar, as for the euro. That is one of the preconditions that he himself has set for joining the euro.
The Treasury's own study of the economic tests states that the UK economy has become increasingly out of step with Germany and more synchronised with the United States. The document says that, if the UK were to enter monetary union,
the loss of domestic monetary policy and the lack of exchange rate freedom could make the UK cycle more volatile.
That means more boom and bust—the right hon. Gentleman ought to be aware of that, if anybody is.
Why are there no answers today from the Prime Minister to those fundamental questions? Is it not foolish to embark on a changeover plan without the faintest clue


about how the necessary convergence of the economies is to be achieved in the first place? Is it not foolish to do so without knowing why we should want to converge with economies in which one in eight people is out of work in any case?
The Prime Minister has given a long statement without being specific in any way about the costs involved. He referred vaguely in the middle of his statement to tens of millions of pounds of public money. Why will he not say how much money will be spent in the public sector that could have been spent on the education, health and public services that he said he would provide?
Why do the accompanying documents—which I have just seen on coming to the House—give no clue as to what is involved for the private sector? There are two pages about what it means for a corner shop under the heading, "Case Study: A Corner Shop". It begins:
A small corner shop sells a variety of groceries and household supplies.
It will be mightily pleased to hear that. The document continues:
on a given date the shop could simply switch over from giving change in sterling to giving change in euros.
It does not say how much that will cost. The only figure mentioned in the whole two pages on a corner shop is £1.99, on the basis that, if we convert from pounds into euros, the shop might not charge things at £1.99 any more.
What use will the document be to businesses? Are not tens of millions of pounds a huge amount for taxpayers and businesses to pay before such fundamental questions are answered? Does not the Prime Minister recognise that most businesses in the country are small and that the thousands of small businesses represented by the Federation of Small Businesses are against joining the euro and will not be persuaded unless they can see greater economic advantage?
Unless the public have decided to join, they should not be forced to spend their hard-earned money on a changeover plan. Is not the money really being spent so that the Prime Minister can show that he is doing his best to sign us up to the euro, parading in front of EU Councils as the man who would join tomorrow if only the stubborn electorate would allow him? Are not the tens of millions of pounds involved a high price to pay for his vanity?
Does not the Maastricht treaty require countries preparing to join the euro to shadow it for at least two years—not to join the exchange rate mechanism, but to shadow the euro? The Prime Minister spent 20 minutes talking about preparing to join without saying a word about the most important thing that one has to do if one wants to join.
Does the Prime Minister have any plans to shadow the euro before the next general election, with all that that means for running our economy according to conditions in other countries rather than in our own? If so, he should come clean now; and, if not, why do we need a changeover plan in the meantime? Why has he produced a changeover plan that talks about computer software and cash registers but is unable to say if or when the Government will do the most important thing?
This morning, the Prime Minister's press secretary claimed that the statement was about giving the country a choice. As he was briefing on the statement several hours in advance, it is a wonder that the Home Secretary has

not slapped an injunction on him by now. Is it not the case that, instead of giving people a choice, the national changeover plan is part of a national handover plan, handing over our economic and political freedoms before we have even seen whether the single currency works for anyone, let alone for this country?
The Prime Minister wants to bounce the British people into joining the euro by spending tens of millions of pounds of their money on convincing them that it is inevitable. He says that it is not inevitable, but this whole process is designed to make it so. He wants to change the cash registers, computers and banking systems so that he can turn round and tell the British people that they have no choice but to change their currency.
Does this not all add up to a strategy of pretending to give people a choice while steadily denying and diminishing that choice? Is it not an attempt to lull people into thinking that a nation that has decided its own destiny for 1,000 years is no longer fit to do so? The Prime Minister has built his recent career on being all things to all people and reassuringly facing in one direction while heading off in another. That is the trick that he has perfected, and he has now surpassed himself: while he trumpets his love for the pound, his love for the euro is the love that dare not speak its name.
Would not a Prime Minister who really wanted to give the country a choice set out a viable alternative and show the people that there is another option and that we can choose to make a success of our own currency, as part of the European Union, trading in the euro as we trade in the dollar, in Europe but not run by Europe? Should not he make it clear that for the sixth largest economy in the world to have its own currency is a perfectly viable proposition and set out a strategy for how Britain can take the fullest advantage and make the most of the freedoms and opportunities of keeping the pound?
The Prime Minister does not want to develop such a strategy. He wants people to believe that the decision is made, that entry is inevitable and that the decision of the British people is a formality. I believe that he will find that he is very much mistaken.

The Prime Minister: At least the right hon. Gentleman has made it clear that he is opposed to a single currency for good, for ever.

Mr. Hague: No, I have not.

The Prime Minister: No, he has not, he says. Well, he could have fooled me. We are to protect, are we, the thousand years of British history for the next Parliament but not the one after? This is the fourth position that the right hon. Gentleman has had on the issue since the election. In May 1997, he said that he was
against the single currency in principle.
Then he said that he was against the single currency in principle "for the foreseeable future". Then he said that he had always said that
we intend to oppose it at the next election".
That would mean for the next Parliament. Then he said:
I don't think it's necessary to say we are against it in principle.
Now he is saying that he is against it for the next Parliament, but not that he is against it for ever. If anyone wanted to know why he and his party are not taken seriously on this issue, they should have listened to him just now.
I shall deal with some of the points that the right hon. Gentleman made. The whole purpose of the national changeover plan is to make the preparations necessary to allow us to make a choice. If we do not make those preparations, we will not be in a position to make the choice. As he has just told me that he does not rule out joining, he would be in the same position but at a later stage. It is important to try to do what is right for this country's interests. The right hon. Gentleman says that we are going to push people into it, but we have made it clear that there will be a referendum and people will have the ultimate choice. However, to allow them to be in the position to make that choice, especially with the euro now a reality, it is important that we make those preparations.
I believe that the expenditure is right, in order to prepare us for the euro. The Chancellor pointed out to me that the expenditure will be somewhat less than the amount the Conservative Government lost in their exit from the exchange rate mechanism. However, we do not want to bring back those memories.
The truth of the matter is that the Conservatives said that it would not happen. They were wrong. They said that if it did happen, it would collapse. They were wrong. Now they say that, whatever the circumstances, our motto should be "be not prepared". Wrong again. They have been wrong on every major issue connected with this policy every time that they have opened their mouths. The ostrich strategy will simply not work.
Does the right hon. Gentleman understand that he is the first Tory leader in living memory to put himself on the opposite side from the CBI, the BBA, the British Chambers of Commerce and the City of London? We could even have the delicious irony of going into the next general election with the only fears on the financial markets being the prospect of a Tory election victory. That, I am afraid, is his contribution to the Conservative party, and he will rue the day he made it.

Mr. Paddy Ashdown: There is a rule of thumb about Government statements in the House, which is that the longer the statement, the more opaque the policy. That is a bit of what we heard earlier. I am reminded of a comment from a Minister earlier today when he was asked whether entry was a matter of when or if. He said that the Government's policy was that the two words are now interchangeable. I do not know precisely what that means.
The statement was very significant. Is not the truth simply that today the Government have crossed the Rubicon in favour of the euro? I greatly welcome that, even though the Government have crossed the Rubicon only by the tiniest millimetre. I welcome it even though the Government are trying to pretend that they have not crossed the Rubicon. I welcome it because now the Government will have to defend their position—something that they have not done before.
The statement has two levels: the level that one sees, and the level that one is supposed not to see. The level that one sees is the perfectly sensible statement about measures to be taken in preparation for the euro. We welcome those measures, which are sensible, realistic and practical. I am glad that they will be debated and voted on in the House.
The level of the statement that we are not supposed to see is the continuation of the Government's policy of leadership by stealth. They move forward a millimetre at a time, but sooner or later they arrive at a point from which they cannot go back. That point has been arrived at today.
I have a question for the Prime Minister. Today he has been attacked by the Tories, and tomorrow he will be attacked by the Tory, Euro-sceptic press. Does he then leave the position undefended, or does he leave it to others—such as the CBI and the other organisations that he has just mentioned—to defend it for him?
All those organisations have shown more leadership on the issue than the Government, but the Prime Minister cannot leave it to them. The Government will have to defend their position: they can follow a policy of stealth, but they cannot win a referendum by stealth. Unless the Government are prepared to come forward and argue the case for the euro, they risk this decision, the most important that Britain has to face, being lost by stealth. [HON. MEMBERS: "Hear, hear."] That response shows what that lot on the Conservative Benches want to happen. That is the policy that the Government are currently following.
Is it not a tragedy for Britain, as this country faces the most important decision that it will face in the next two or three decades, that the Government take the view that they want to join the euro but try to pretend that they do not, and that the Tories take the position that they want to get out of Europe but try to pretend that they do not?
I have a single, specific question for the Prime Minister, which will reveal his intentions. He has told us that he wishes there to be a referendum early in the next Parliament, which means that the necessary legislation must be passed in this Parliament. Does he understand that?

The Prime Minister: First, I will try to take that as a statement in support, but it is a little unfair to accuse me of acting by stealth. After all, I am all here, in the House of Commons, making the statement. As for the referendum, the position is as we have set it out.
I shall deal head on with the basic criticism made by the right hon. Gentleman. There are three positions with regard to the euro—"no, never", "yes, now" and "yes, on condition". That last position is where we are now, and it is the right position to be in. It allows us to signal our intention, to set out the proper conditions, and to say what is necessary for the euro to work for the British national interest.
I believe that that balanced, sensible course sets a direction for this country, but it makes it clear that joining the euro must be in the national economic interest and it sets out the conditions for that. I surmise that, if we were in different positions and I was asking the right hon. Gentleman questions, he would probably agree that these economic conditions have to be met. When he reflects on the matter, he is probably in the same position as we are.

Mr. Martin O'Neill: Does my right hon. Friend agree that it was fair of the Leader of the Opposition to say that the position was unnecessary, expensive and time-consuming, but that the right hon. Gentleman was referring to his own position? The Tory position is unnecessary because people want to join the euro; it is expensive because the longer we stay outside,


the greater will be the problem for business; and it is time-consuming because the House has no idea when the convergence criteria would be met to the satisfaction of the Conservative party. Is it not the Government alone who are prepared to take the necessary steps and put the choice to the people in a referendum?

The Prime Minister: My hon. Friend makes the sensible point that it is absurd of the Conservative party—if what we have heard today is their official position—to say that it will rule out the euro in principle, but only for 10 years. That is an absurd position: one either rules out the euro in principle, or one sets out the conditions necessary for entry.
My hon. Friend is also right to say that the position of the Conservative party is contrary to our national interest in the sense that, unless we make the expenditure and the preparations, we cannot be in position to exercise the choice. We are not forcing business to spend money, but saying what it would be sensible to do if they wish to be in a position to take advantage of the single currency, should Britain join it. I think that that common-sense position will appeal to the vast majority of people in business.

Mr. Kenneth Clarke: The Prime Minister will recall that I have on occasion been extremely critical of his and his Government's weasel words on EMU, whether they were in articles in The Sun or in statements to the House. Will he therefore accept that I welcome the marked change of tone represented by today's statement? In particular, I welcome the fact that he has reached agreement with representatives of the majority of British business on the practical steps that need to be taken if we are to give reality to the policy of prepare and decide.
Will the Prime Minister undertake to continue from now on to put his mouth where he thinks our money ought to be? Will he confirm that, in the real world, the British people should be concentrating on whether the country has achieved genuine and sustainable convergence with the economies of the euro zone, whether his Government can succeed in negotiating satisfactory terms for entry, and what their decision will be in the referendum, whenever it may come?

The Prime Minister: I largely agree with the right hon. and learned Gentleman. This is a major debate about the future of our country, and I have set out the Government's position by making a statement to the House. I shall, of course, carry on stating why I believe our position to be in the national interest. The right hon. and learned Gentleman and I would share a view on one central point: to be pro-British, one does not need to be anti-European. We can be both, and, in a modern world, we should be.

Mr. Giles Radice: Does my right hon. Friend accept that his statement represents a major step forward? Not only did he set out practical preparations that the country must take, but he made it clear that, provided the economic circumstances are right, it is the Government's intention to join. This is the first time that the Government have said that so clearly. Does he agree that the time has come for a great national debate to inform the British people about the euro, and that the British Government must lead the debate?

The Prime Minister: Of course, my statement and its aftermath are part of the national debate. It is important

that we have set out the economic circumstances that would make joining in our national interest. We have set those circumstances out clearly and we have signalled the Government's direction. We have set out the conditions clearly, and that is the right position to take.

Sir Edward Heath: The Prime Minister has been absolutely right in everything that he has said today. I welcome that, although I would have welcomed it even more if he had said it last June when the whole process began.
We risk what we suffered before for 22 years when we had no influence whatever in the policies being followed by what is now the European Union. We cannot afford to take that risk again. I urge that preparations should be made as speedily as possible. We have heard many pseudo-arguments, all of them dominated by one economic fact throughout the history of the world. That fact is this: no single market in the world has more than one currency. We cannot carry on successfully in a single market if we go for multiple currencies. That simply is not feasible. The rest of Europe knows that perfectly well, and the United States knows it too. Where would the US be if it had had more than one currency? There is no argument against that point, and I hope that the Prime Minister will act as speedily as is practically possible.

The Prime Minister: It is important to realise that a single currency in a single market can bring benefits in terms of jobs and investment in industry. That is why we have set out our direction today. There must be settled and sustainable economic convergence, but the direction needed to be set out, and it has been.

Mr. Tony Benn: Will the Prime Minister make it clear when the information published by the Government is sent out that every elector will be told that, if Britain is a member of the single currency, he or she will lose the right to elect or to remove on polling day those who make the economic decisions that affect our lives? Will he also point out that, under the Maastricht treaty, he himself would be in breach of the law if he tried to influence the decisions of the central bank? Is he aware that democracy is held by many people, including me, to be a national interest? Is he also aware that, on this matter, there are divisions in all parties and there will be a free vote in the House? Will he give us an assurance that the Cabinet will have the same right to freedom that was made available in 1975 during the previous referendum campaign?

Hon. Members: Hear, hear!

The Prime Minister: It is interesting to hear what I sometimes call the Thatcher-Portillo-Benn axis. I understand why my right hon. Friend holds that view very strongly indeed, but he must understand that there are those of us who are equally in favour of people having their say, which is why we will have the referendum. We have pledged that the final decision will be that of the British people. Pooling our sovereignty in this way, if it is in the national economic interest, better for British jobs, investment and industry and enhances British influence and standing in the world, is the right thing for Britain to do. We should have the campaign on the basis that people on either side of the argument are honourably intentioned


but that we disagree, not about whether we should follow the national interest, but about what it is. I happen to believe that it remains in the course that we have set out today.

Sir Michael Spicer: As part of the Prime Minister's changeover plan, has he turned his mind to the collapsing value of the euro? In forcing convergence and complying with the Maastricht treaty, is it his plan to shadow the euro downwards? If so, what will that mean for his inflation target?

The Prime Minister: That is not our policy. The hon. Gentleman and, I am afraid, the majority of Conservative Members want the euro to fail. That is all that they have left—[Interruption.] Literally, that is all that they have left to hope for: that the whole thing collapses. If the euro collapsed, even if we were out of it, it would be a disaster for this country. He and other Conservative Members should get into the real world today.

Mr. Robert Sheldon: While I welcome this most important step in producing a changeover plan, is my right hon. Friend aware that whether we join the euro is the one crucial decision to be taken during the lifetime of this Government? Is he aware that the sooner we make that firm commitment to join, even without setting a date, the more seriously we will be taken by our partners in Europe and the more fully we will be able to participate in the crucial decisions that lie ahead?

The Prime Minister: The conditions are important too. As I said, this is an economic union and conditions relating to economic convergence and to the five tests that the Chancellor set out, including those relating to economic reform, are important for monetary union to work in this country's national interest. So the direction is clear, but those conditions have to remain in place and be satisfied because that also is in the national economic interest.

Mr. Michael Heseltine: Would the Prime Minister recognise that this country, which has proudly defended its sovereignty for 1,000 years, has been told by every Conservative Prime Minister since the late Lord Stockton that we would enhance that sovereignty and our power and influence by drawing closer to Europe? Some of us still believe what we were told and followed the House of Commons whipping procedure at that time.
Will the Prime Minister recognise that his statement—which is a marked step forward in the intention of the Government to join a successful single currency—stripped of its party political rhetoric will be widely welcomed in areas of society way beyond his political party? With that in mind and given that the conditions entrenched in his statement have to be fulfilled before a successful application is made, will he recognise that that will be possible only if there is an all-party grouping to lead public opinion on the matter? Above all else, will he give the House a categorical assurance that he will lead that all-party alignment?

The Prime Minister: If I were a Conservative Member, I should reflect on what a former Deputy Prime

Minister and long-time member of the Conservative party has just said. I believe that the issue is one that should be dealt with across the parties and I certainly intend to be at the forefront of that campaign. I have never believed that this is a issue that can be dealt with by stealth, and I do believe that the economic conditions are important. The national economic interest must always be paramount, but I believe that that is satisfied by the course that we have set out today. I thank the right hon. Gentleman for his support.

Mr. Bill Rammell: I warmly welcome my right hon. Friend's statement. Does he agree that, if we follow the advice of the Conservative party and stay out of the single currency for 10 years, not only shall we be repeating the mistakes of British history for the past 50 years, but it would represent an abdication of political leadership? Does he also agree that, if we believe that a strong single currency is in Britain's interests, striving to meet the five economic criteria set by the Chancellor should be an explicit aim of Government policy?

The Prime Minister: The Chancellor has already made it clear that we want to meet those tests. My hon. Friend is right about the 10 years: the two justifiable positions are to rule out joining a single currency for ever, as a matter of principle, or to set out the economic tests necessary to make joining in the national interest. The Leader of the Opposition must recognise that it is genuinely absurd to rule out joining for 10 years, for that would mean that we had absolutely no influence on decision making, but we would still have to do all the things later that we are setting out today. It is far better to make the test our national conditions and do our best to meet them.

Sir Archie Hamilton: For once, I find myself agreeing with the Prime Minister: it cannot be right for us to join the euro until we have seen convergence in the economic cycles of our economy and that of the Europeans, nor can it be right to join until we have seen the liberalisation of labour and capital markets on the continent. That will take years—so why does the Prime Minister not join my right hon. Friend the Leader of the Opposition in a policy that rules out joining for this Parliament and the next?

The Prime Minister: Because I do not believe that would be sensible or in the country's interests. The right hon. Gentleman is right to say that convergence and economic reform are important, but we shall achieve them far better if we set out a clear direction for the country, which is what we have done today. The purpose of the national changeover plan is to put us in the position of making preparations so that we can make a choice. If we do not do that now, we will be in the position of being able to make no choice at all, and I cannot believe that that is right for this country.

Mr. Dennis Skinner: Does the Prime Minister agree that, on any objective account, the Common Market-European Union has not been a rip-roaring success? The common agricultural policy, as he knows and agrees, has been a total failure; the common fisheries policy is not worth a hatful of crabs; and there are 18 million people out of work in the Common


Market—and no signs of improvement. When we take all that into account, as well as the fact that, in seven short weeks, the euro has fallen by 7 per cent. against the dollar and 4.8 per cent. against the pound, all I have to say to my right hon. Friend—I am sure that he will take it on board—is that he should beware of those carrying out experiments in genetically modified currencies.

The Prime Minister: I think that the balance sheet shows that, overall, the European Union has been immensely positive for Europe and Britain's membership of the European Union has been positive or Britain. Of course we believe that the common agricultural policy needs reform, which is precisely why we are trying to make that reform happen, and of course we also believe that levels of unemployment in Europe are far too high. However, I do not believe that either the single market or the single currency has caused those problems. I think that long-term structural reform is necessary and that we should be part of that process to make sure that we put those people in Europe back to work.
One can criticise the European Union. However, if people take a step back and consider the history of Europe since the second world war, most would say that the European Union has been a success overall.

Mr. Archie Norman: Given that the Prime Minister has today reaffirmed his intention to hold a referendum on this subject, does he agree with Lord Neill, who said that the Government who conduct a referendum of this kind should not distribute at public expense literature—even purportedly factual literature—outlining or otherwise promoting their case?

The Prime Minister: As we said, we shall respond in due course to Lord Neill's recommendations. Of course the rules should be fair for both sides, and we shall ensure that they are. When we respond to Lord Neill's recommendations, we shall publish that response in full so that hon. Members may see it.

Mr. Stuart Bell: The entire House must welcome a statement that takes us towards completing the single market under the terms of the Single European Act, which was passed under the previous Administration. That Tory Government committed us to economic and monetary union.
The Prime Minister said that a Minister from each Department would be enlisted immediately to sell the benefits of the proposal and supervise the single currency changeover. Will he give the House a commitment that those Ministers will be enlisted, with the foot soldiers of the European movement—those who support the single currency--from now until the general election?

The Prime Minister: The purpose is to ensure that the Government are geared up properly for the necessary preparations. My hon. Friend makes a worthwhile point by mentioning the progress that we have already made in the European Union. The Single European Act, which was agreed by the previous Government, was a substantial act of integration, involving qualified majority voting on a scale not seen hitherto and breaking down a series of barriers and securing standardisation across many areas within the European Union. It is important to view this move as part of development in Europe.
All the way through, we have set out clearly the direction that we believe is right for the country and the economic conditions necessary to make EU membership in this country's interests. That balance between the direction and the conditions necessary to make that direction viable and sustainable for this country is precisely right.

Mr. Ian Taylor: The Prime Minister has acted in what I believe to be the national interest by engaging first gear and moving towards preparing to join the euro. Anyone who opposes a national changeover plan must not want to have a referendum, because it can be held only if the British people are prepared. Anyone who thinks that British industry should not prepare does not understand the challenges that it faces: all businesses, whether small or large, are part of a supply chain.
Will the Prime Minister recall the words of the chief economist at ICI who said that it would not damage investment in the United Kingdom if we did not join immediately, but any signal that we would be out for a protracted time could be extremely dangerous for this country's economy and investment? I hope that the Prime Minister continues to change up gears as he moves towards the referendum.

The Prime Minister: There is no doubt that, if we were to follow a course of hostility to the whole concept, it would damage this country's influence and the prospects for investment in the United Kingdom.

Mr. John Bercow: What is the right hon. Gentleman's empirical evidence?

The Prime Minister: The hon. Gentleman asks what the evidence is. If he were to talk to most people around the world who invest in this country, he would learn that they recognise that it is important for Britain to be part of the European Union and to be positive about the single market and the single currency.
The hon. Member for Esher and Walton (Mr. Taylor) is absolutely right: there can be no referendum without a national changeover plan. If we do not start the preparations now, we will not be able to join—even if we wish to do so. The Conservative party's official position today is that, even if joining is manifestly in the country's interest—even if it is plainly in the interests of industry, jobs and investment and even if business and industry are clamouring for us to join—we cannot be in a practical position to join. That is not a sensible position for a party that used to be able to speak for a section of business.

Mr. Denzil Davies: Does my right hon. Friend recognise the irony that when a British Minister of Agriculture is, for the umpteenth time, in Brussels trying to negotiate radical reform of one common European policy—the common agricultural policy—he, as Prime Minister, is announcing to the House a plan to join another common policy, a common monetary policy? The damaging effect of that would be far greater than any effect that the wretched CAP could have.

The Prime Minister: I do not agree. I have set out the tests and economic conditions that have to be met for the common monetary policy. As I said, our position involves, first, seeing whether there is a period of sustained convergence; secondly, finding out whether the European Central Bank settles down, and, thirdly, dealing with the issues arising out of the Chancellor's five economic tests for flexibility and economic reform in Europe. We are perfectly placed. We can set out a direction for the country, set out the conditions and, as a result of the changeover plan, take advantage of the fact that we have made active preparations.

Sir Peter Tapsell: Will the Prime Minister appreciate, leaving aside the vital constitutional issues, that most serious economists would tell him that it will be impossible to say whether or not the five economic tests have been satisfactorily met until the completion of at least two economic cycles, which makes nonsense of the timetable that he is putting before the country?

The Prime Minister: We do consult industry widely. I have set out the position of the Confederation of British Industry, the British Chambers of Commerce and the British Bankers Association, and most people in the City of London disagree with the hon. Gentleman. It is not correct to say that we are not listening to business and industry; we are doing so.

Mr. John Home Robertson: This statement is all the more welcome because it has been made regardless of the ravings of unelected, offshore press barons. The Leader of the Opposition talked about costs. Since the cost to the British economy of exchanges with European currencies in recent years has been equivalent to our contribution to the European budget, I suggest that the sooner we join the European single currency, the better.

The Prime Minister: The extraordinary thing about the Opposition's position is that they are opposed not only to the single currency, but to preparations. The right hon. Member for -Richmond, Yorks (Mr. Hague) could have said that the time scale should be different, but he said that we should not even prepare and put ourselves in the position of being able to make a choice. That is plainly wrong. Without repeating to my hon. Friend what I have already said, I think it important that the conditions be met because they will make the satisfaction of our national economic interests the paramount consideration.

Mr. Howard Flight: In his statement, the Prime Minister hedged his election commitment on the timing of the referendum and said that it would occur after the next election, except in unforeseen circumstances. Will he be gracious enough to tell the House what circumstances he envisages might lead to an earlier referendum?

The Prime Minister: If they were foreseeable, they would not be unforeseen. In referring to unforeseen circumstances, I was repeating precisely the words that the Chancellor used in his statement of 27 October.

Dr. Stephen Ladyman: Does my right hon. Friend accept that, as he consults business about his plans, the only criticism that he will hear is that preparation should be faster and it is essential that he picks up a gear? If he speaks to executives in Marks and Spencer, as I have done, he will hear that they have already gone a long way towards preparation. [Interruption.] If he speaks to people who are running small and medium enterprises, he will be told that if a Government ever came to power wedded to the sort of Europhobia that we have heard from the Leader of Opposition today, that Government would put an end to their businesses. Will he give them the assurance that they want—that what the Government should provide is leadership and help with their preparations, and that what the country needs is a clear, fact-based debate so that we can all be of one mind when we go into the euro?

The Prime Minister: That is exactly right. We are of course undertaking the preparations in consultation with business and industry, which again is why it is so bizarre that we are told by the Opposition that we should not even make those preparations. I would point out to those Opposition Members who now even shout at the idea of Marks and Spencer that, when the euro notes and coins come in, a lot of British companies—some of them—will be accepting them. Therefore it is sensible, surely, to make preparations.

Mr. John D. Taylor: As one who identifies with Europe with ease and served in the European Parliament for 10 years, I have absolutely no doubt in my mind that the euro is driven more by politics than by economics. The promoters of the euro are people who believe in a united states of Europe—a Europe of the regions—and the diminution of the nation state. I am sorry to say it, but I think that the Prime Minister's statement could be the beginning of the end of the United Kingdom. However, he was honest when, in his statement, he said,
I do not dismiss the constitutional … issues
they are real, and he was right when he said that. Has he drawn those real constitutional issues to the attention of the palace?

The Prime Minister: The position that the right hon. Gentleman outlines is the "no, never" position. It is a position that says we never, ever go in. I totally understand that position, but I personally believe that, if it is in the national economic interest, we should go in. I put my statement in the way that I did, not to dismiss the constitutional issue, but simply to say that, in the end, the only question is, "Is it an absolute barrier to joining?" and my answer to that is no; if it is in the interests of British jobs, British business, British investment, we should do so. I think that that is correct; and the answer to the last part of the right hon. Gentleman's question is no.

Business of the House

The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): The business for the remainder of this week will be as follows.
WEDNESDAY 24 FEBRUARY—Until 12.30 pm, a debate on
the third report from the Northern Ireland Affairs Committee on composition, recruitment and training of the Royal Ulster Constabulary, followed by a debate on the sixth report from the Agriculture Committee on flood and coastal defence, followed by debates on the motion for the Adjournment of the House.
Remaining stages of the Social Security Contributions (Transfer of Functions, etc.) Bill [Lords].
Remaining stages of the Rating (Valuation) Bill.
The Chairman of Ways and Means has named opposed private business for consideration at 7 o'clock.
THURSDAY 25 FEBRUARY—Debate on Welsh affairs on a motion for the Adjournment of the House.
FRIDAY 26 FEBRUARY—Private Members' Bills.
The business for next week will be as follows:
MONDAY 1 MARCH—Remaining stages of the Sexual Offences (Amendment) Bill.
Remaining stages of the Scottish Enterprise Bill.
Motion relating to the Corporation Tax (Instalment Payments) Regulations.
TUESDAY 2 MARCH—Opposition Day [6th Allotted Day].
There will be a debate on an Opposition motion, subject to be announced.
WEDNESDAY 3 MARCH—Until 2 o'clock, there will be debates on the motion for the Adjournment of the House.
Consideration in Committee of the House of Lords Bill.
THURSDAY 4 MARCH—Conclusion of consideration in Committee of the House of Lords Bill.
FRIDAY 5 MARCH—Private Members' Bills.
The provisional business for the following week will be as follows:
MONDAY 8 MARCH—Remaining stages of the House of Lords Bill.
Motion on the Implementation Bodies (Northern Ireland) Order.
TUESDAY 9 MARCH—My right hon. Friend the Chancellor of the Exchequer will open his Budget statement.
WEDNESDAY 10 MARCH—Until 2 o'clock, there will be debates on the motion for the Adjournment of the House.
Continuation of the Budget debate.
THURSDAY 11 MARCH—Continuation of the Budget debate.
FRIDAY 12 MARCH—Private Members' Bills.
MONDAY 15 MARCH—Conclusion of the Budget debate.
The House will also wish to be reminded that, on Wednesday 24 February, there will be a debate on VAT fraud in intra-community trade, the Independent Fraud Office and the Court of Auditors annual report for 1997 in European Standing Committee B [Economic Secretary to the Treasury], and that, on Wednesday 10 March,

there will be a debate on transport infrastructure charging in European Standing Committee A. Details of the relevant documents will be given in the Official Report.
[Wednesday 24 February:
European Standing Committee B—Relevant European Community document: OJC 349, Court of Auditors report for 1997; 14031/98, Independent Fraud Office; 10786/98, VAT Fraud in intra-community trade; Relevant European Scrutiny Committee reports: HC 34-vi, HC 34-vii and HC 34-viii (1998–99).
Wednesday 10 March 1999:
European Standing Committee A—Relevant European Community document: 10778/98, Transport Infrastructure Charging. Relevant European Legislation Committee Report: HC I 55-xxxvii (1997–98).]

Sir George Young: The House is grateful for this week's and next week's business and for an indication of the business the week. after. Can the Leader of the House confirm that we will be reverting to the usual pattern of having business questions on Thursdays?
Will the Foreign Secretary be making a statement to the House following the expiry of the deadline for the talks at Rambouillet? In view of the interest in the subject on which the Prime Minister has just made a statement, and the large number of hon. Members who were not called, can we have a full debate in Government time on the national changeover plan? During that debate, can we have an answer to the question put by my right hon. Friend the Member for Richmond, Yorks (Mr. Hague), namely, whether the Government plan to shadow the euro or not?
The Leader of the House has confirmed the date for the Budget, but can she confirm that we have not had the normal debate on public expenditure which used to take place in the autumn? Can she assure the House that that debate will be provided in due course, in Government time?
Tomorrow, the House is expecting the report on the tragic murder of Stephen Lawrence. Can the Leader of the House find time to debate the important issues raised by Sir William Macpherson and initiate a debate, which will, I hope, avoid any witch hunt of Sir Paul Condon? On that subject, can she guarantee that the House will be told the outcome of the leak inquiry? What has happened to the Home Secretary's plans to publish the draft freedom of information Bill, which is constantly trailed but never appears?
Finally, the Leader of the House has outlined the broad dates for the Easter and Whitsun recesses. Can she give the House the actual dates, so that it can plan its future arrangements with some certainty?

Mrs. Beckett: I can confirm that it is normally my intention to make the business statement on Thursday, but I thought that it would be for the convenience of the House to have the statement early this week, because we were not sitting last Thursday; otherwise, hon. Members might not have had much notice of the business to come.
The right hon. Gentleman asked whether my right hon. Friend the Foreign Secretary will be making a statement on issues relating to Kosovo. Obviously that is a matter that the Government will keep under review, but the right


hon. Gentleman will know that, at present, those issues continue to be discussed. He asked also for a debate in Government time on the matters on which my right hon. Friend the Prime Minister has just made a statement. That statement was, of course, very full, although I recognise that many hon. Members wanted to speak. As the right hon. Gentleman will have realised from the business statement, there is time for the Budget debates; but we will bear in mind any request, made through the usual channels, for a wider debate on that matter.
The right hon. Gentleman asked about a restoration of what he called the normal debate on public expenditure. To my recollection, what used to be the normal debate on public expenditure was dispensed with by the Conservative Government when I was shadow Chief Secretary, which was a considerable time ago, and they never managed to reinstate it. However, that is certainly a matter that I will bear in mind and will discuss through the usual channels.
We obviously intend to have a full statement on matters that are raised following the outcome of the Stephen Lawrence report, although I cannot add anything to what my right hon. Friend the Home Secretary said yesterday about that document being leaked.
It remains the Government's intention to publish the freedom of information Bill; and I am afraid that I am not yet in a position to give the right hon. Gentleman the actual recess dates.

Mr. George Galloway: When will either the Defence Secretary or the Foreign Secretary make a statement to the House on the dramatically escalating conflict in the skies over northern Iraq? In the past few hours, two 2,000 lb bunker-busting bombs—likened by Jane's Defence Weekly to tactical nuclear weapons—were dropped very near the important Iraqi city of Mosul. As you know, Madam Speaker, Britain is not at war with Iraq and any pilots dropping such bombs who either fell from the sky or were shot down would not be prisoners of war. They would be in a very perilous position indeed, having wreaked such devastation on Iraqi cities, and would not be protected by the conventions of war.

Mrs. Beckett: All I can say to my hon. Friend is that, as he knows, the Foreign Secretary is heavily engaged in discussions on other matters at present. We endeavour to keep the House informed of major and significant developments. With regard to his final remarks, may I say to him with respect that being prisoners of war did not much protect British pilots who were shot down over Iraq in the past?

Mr. Paul Tyler: We warmly endorse the request for a full debate in Government time on the euro changeover plan. May we have an answer to the question that my right hon. Friend the Member for Yeovil (Mr. Ashdown) put to the Prime Minister, which was not answered, about the timing of legislation for the referendum? We must ensure that it is in place before the next general election so that we can take advantage of the proper circumstances at the proper time.
On 4 February, I asked the Leader of the House whether she had taken into account the damaging statement made by her colleague, the Minister of Agriculture, Fisheries and

Food, which appeared to suggest that maternal transmission was now the accepted explanation of how BSE could continue beyond the 30-month period, and she undertook to draw that to the Minister's attention. Can we now have a full statement on the Government's attitude to this matter, as the chief scientific adviser has now gone on record as saying that beef on the bone should not be banned on scientific grounds and that it is entirely a matter of politics? I appreciate that it is not possible to give a date for further debate on this issue because of time constraints over the next few weeks, but can we have an assurance that the Minister will come before the House and explain that apparent change in attitude?

Mrs. Beckett: On the timing of the legislation for a referendum, we are not yet at that stage. The hon. Gentleman will remember, as will the whole House, that, when the House has decided that it wants a referendum to be conducted, it does not necessarily take long to pass the legislation—I believe that it took only six weeks to deal with legislation for a referendum on the Scotland Bill.
I did take up with my right hon. Friend the Minister of Agriculture, Fisheries and Food the matter that the hon. Gentleman raised with me about beef on the bone. I recall the observations of the chief scientific adviser, although not precisely in the terms to which the hon. Gentleman alluded. He will recall that my right hon. Friend made an extensive statement on that matter in the recent past—certainly since the hon. Gentleman raised the matter with me.

Mr. Tam Dalyell: Pursuant to the answer that my right hon. Friend gave my hon. Friend the Member for Glasgow, Kelvin (Mr. Galloway), are not few other matters more important than a parliamentary discussion of the whole question of bombing and its endorsement? Incidentally, the endorsement of the bombing of the Al-Shifa factory in Khartoum has turned out to be a huge mistake.
There should be a proper discussion in Parliament of what on earth we are up to in Iraq. Is the bombing to continue? It is all very well for my right hon. Friend to say that last time our pilots were badly treated, but if there is no declaration of war they have no legal rights, as we understand them, under the Geneva convention. Even if a shell does not hit one of the Tornados, heaven help us—if a Tornado can malfunction over Lincolnshire, it can certainly malfunction over Iraq. We are drifting into constant war. What matter could be more important for the House of Commons to discuss?

Mrs. Beckett: I fear that I do not share my hon. Friend's analysis of the position in which we find ourselves in Iraq. He will be as conscious as I am of the fact that those engaged in overflying, whether in the north or the south of that unhappy country, are there to prevent the free operation of Iraq's armed forces in persecuting those who live in the north and south of that country. They are there in pursuit of United Nations policy.
On the general issue of our approach to these matters and the policy that drives that approach, I am sure that my hon. Friend will recall that, only yesterday, we had questions to the Secretary of State for Defence, when these matters may have been aired.

Mr. Nicholas Soames: The Government insist on giving the House of Commons these


inappropriate gift days, thereby preventing the Opposition from holding the Executive to account. If that should happen again, will the right hon. Lady procure the Prime Minister's attendance on the Tuesday before the free days, so that he can answer questions from the whole House?

Mrs. Beckett: I remind hon. Members that there was considerable pressure from both sides of the House—primarily from people who had not voted for us to run the experiment—to have different sitting hours on Thursdays and the possibility of some free days roughly during last week. The House took a decision on that matter, and many hon. Members who did not vote for it were foremost among those pressing for those days to be awarded. I further remind the hon. Gentleman that, although it has clearly slipped the memory of most Conservative Members, the Prime Minister attends Prime Minister's Question Time more consistently than either of his last two predecessors.

Mr. Tony Benn: Is my right hon. Friend aware that her answer about Iraq was totally unsatisfactory? British forces are continually engaged in conflict. They may be shot down, but they are killing civilians with no legal authority. Dennis Halliday, who is in charge of the United Nations oil-for-food programme, has said that between 5,000 and 6,000 Iraqi children under five are dying every month because of the sanctions. If the House of Commons cannot discuss that, and has to rely on the "Today" programme and "Newsnight", it reflects the Government's attitude to the role of Members of Parliament in this hugely important matter.

Mrs. Beckett: My right hon. Friend has gone beyond the terms of our defence engagement in Iraq. I am sure that he is as conscious as the rest of us of the fact that it is not because of sanctions that children are dying for lack of food in Iraq. If anyone is dying for lack of food in Iraq—[Interruption.] I say to my hon. Friend the Member for Glasgow, Kelvin (Mr. Galloway), who is interrupting, that he knows that that is the truth. The Iraqi Government have the capacity to use the resources they get from selling oil to purchase food and medicines. If they do not to do so, because they choose to purchase arms, that is a tragedy—but it is not a tragedy of the British Government's making.

Mr. Eric Forth: May I press the Leader of the House on the matter of a public expenditure debate, which was raised by right hon. Friend the Member for North-West Hampshire (Sir G. Young)? Is the right hon. Lady hiding behind the arrangements made by the previous Government? Is she suggesting that she wants to continue those arrangements, and approves of them, or will she bring the public expenditure debate more into line with what her right hon. Friend the Chancellor is doing? The House has the impression that she is trying to hide something. Why can we not have a proper debate on public expenditure in its own right as a matter of urgency, so that we know exactly where we stand on that key issue?

Mrs. Beckett: I am not hiding behind anything, and I am not sure what on earth the right hon. Gentleman thinks he is saying. I remind him and other Conservative Members that, when he was a Minister, the previous

Government made substantial changes to the handling of our debates on the Budget and on public expenditure. Those changes were never rectified. I agree that the matter should be looked at again, and it will be. It does not, however, lie in the mouths of Conservative Members to condemn the Government on a matter about which they did nothing.

Mr. Richard Shepherd: Is it not absurd that the House of Lords is now on the second day of a debate on the White Paper on Lords reform, whereas we have so far been denied such a debate, which would be forward looking? There are obviously constraints, which we have mentioned, on discussing the Government's view of how the House of Lords should be reformed by way of the Bill currently before Parliament.
Furthermore, in any debate on the arrangements that the Prime Minister has just announced, could someone answer the point made by the right hon. Member for Chesterfield (Mr. Benn) about the democratic control of the people over economic policy, and results through the ballot box?

Mrs. Beckett: It is true that the House of Lords is currently debating the White Paper, but the House of Lords does not have the Bill before it, because the Bill is being debated in the House of Commons. We have not ruled out a debate on the White Paper, but, as the hon. Gentleman will recognise, it and the Bill deal with somewhat different matters: the Bill deals with the changes that the Government propose to make now, while the White Paper deals with the future. The fact that the House of Lords is discussing that does not mean that we should be discussing it at this stage.
The hon. Gentleman asked about the point made by my right hon. Friend the Member for Chesterfield about what he described as the people's loss of democratic control over their affairs. I can only say that I have no doubt that these matters will be aired, and aired extensively, as they have been ever since the days when a Conservative Government took us into the European Community. I must add, however, that in my view both the hon. Gentleman and my right hon. Friend are among those who would normally be telling us that the British people do not have enough democratic control over their financing in any event, irrespective of whether we join the single currency.

Mr. Robert Maclennan: I acknowledge what the Leader of the House has said about the speed with which a Bill to implement the intention to hold a referendum may be pursued, and also what the Prime Minister said earlier about the need for fairness in the conduct of that referendum; but is the right hon. Lady in a position to say when the Government may present proposals for the establishment of an election commission with the remit of considering rules guaranteeing such fairness?

Mrs. Beckett: I have nothing to add to what my right hon. Friend the Prime Minister said, which was that the Government were considering the recommendations that had been made and would present proposals in due course.

Mr. John Wilkinson: This is the fourth year running in which the European Court of


Auditors has issued qualified accounts for the European Union. Would it not be appropriate for the debate on the EU's budget to take place in the Chamber, rather than being tucked away in Standing Committee B? The people of this country could then be made aware of the extent of the misappropriation of funds, the fraud and the endemic corruption in the organisation into which her quisling Government wish this country to integrate.

Mrs. Beckett: It was, in fact, the last Government who decided that such matters should be dealt with by the European Standing Committees, and their decision has been endorsed repeatedly by the House. As the hon. Gentleman will know, any Member can take part in the Standing Committees' debates. Only recently, the Government widened the remit of the Committees, enabling them to discuss the full range of issues—including legislative proposals from the European Commission—that may be relevant to European Union business. That is a major step forward. We are improving scrutiny of European business, without having to bring it back to the Floor of the House.

Mr. Christopher Gill: The Leader of the House will have observed the large number of right hon. and hon. Members who were not able to question the Prime Minister on the changeover plan. May I repeat the call for an opportunity for the issue to be debated?
May I also make a plea for a debate on Gibraltar on the Floor of the House? That might also enable us to discuss the wider issue of dispatching Her Majesty's armed forces to other regions of the world to defend or protect people who are not Her Majesty's subjects, while the livelihoods of Her Majesty's subjects in the colony of Gibraltar are threatened by the unreasonable and intolerant attitude of a so-called partner in the European Union.

Mrs. Beckett: I cannot say that I feel inclined to offer to find time for a debate enabling us to discuss sending the armed forces to Gibraltar, but certainly the Government want any difficulties and disputes arising there to be settled as amicably as possible, and we are turning our mind to that.
I did indeed observe the number of Members who were anxious to take part in the exchanges about the Prime Minister's statement, but, as the hon. Gentleman will have noted, I have reminded the House that the Budget debate will provide an opportunity for the issue to be aired.

Mrs. Theresa May: Will the Leader of the House consider making time available for investigation of the procedures by which the House considers secondary legislation? Frequently, statutory instruments are available only late at the Vote Office, so that considerable time has passed before hon. Members are able to examine them and consider whether they wish to pray against them. SI 229, for example, was laid before the House on 5 February, but was not available to hon. Members until 15 February. SI 274 was laid before the House on 8 February, but was not available before 15 February. SI 337, laid on 15 February, was still not available as of this morning. Does the Leader of the

House agree that the House cannot perform its proper job of scrutinising Government legislation if Departments withhold the information necessary to do that job?

Mrs. Beckett: I am indeed mindful of the difficulties that are caused, and I experienced for many years in opposition. The hon. Lady will find that those difficulties are not new to the House—sadly—although they might be new to her. I share her view that the situation is not desirable. The Government are doing everything that we can to improve the handling of legislation, so that such delays do not occur. However, it takes time to rectify the very many defects that we inherited.

Mr. David Wilshire: I am sure that the right hon. Lady will know that, on Tuesday 9 February, I raised a point of order with Madam Speaker, on an apparent leak of the Foreign Affairs Select Committee's report on Sierra Leone. Subsequently—as I am sure that the right hon. Lady also will know—the Minister of State, Foreign and Commonwealth Office, the hon Member for Manchester, Central (Mr. Lloyd), provided a written answer, stating that the Foreign and Commonwealth Office first saw the report after 8 am on 9 February. Today, the hon. Member for Dundee, West (Mr. Ross) admitted that, in January, he leaked a copy of the draft report to the Foreign and Commonwealth Office. However, that statement does not tie in with the information that we received last week or with the stated events of 9 February.
Will the right hon. Lady therefore arrange for the Foreign Secretary to come urgently to the House to make a statement explaining exactly when he, his Ministers, his officials, his advisers or No. 10 Downing street first saw that leaked document, and what use they subsequently made of it? Was it that document that enabled them to rubbish a report that had not yet been published, by making statements to the media at 7 am on 9 February?

Mrs. Beckett: I realise, of course, that the hon. Gentleman is a member of the Foreign Affairs Select Committee. Surely, therefore, he will be aware that it is currently a matter for that Committee, and that, if there has been a leak of a Select Committee report, procedures in "Erskine May"—which I believe he will find on page 670—state what should be done if such an issue arises. Although I bow to no one in my respect for the proper handling of the procedures of the House—personally, I cannot recall that I have ever leaked anything or ever intended to do so—I should tell the hon. Gentleman, and hope that no one will take frivolous offence at it, that for him to suggest that the Foreign Secretary should abandon the talks that we all hope will bring peace in Kosovo and come to the House to deal with a question on that matter puts into perspective the very strange priorities of Conservative Members.

Mr. Shaun Woodward: On a point of order, Mr. Deputy Speaker. In the light of the resignation from the Foreign Affairs Select Committee of the hon. Member for Dundee, West (Mr. Ross)—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. We cannot have a debate on that matter in business questions. I shall take the point of order after business questions have been completed.

Dr. Julian Lewis: Will the Leader of the House find time for a debate next week on the


Government's anti-democratic arrogance and techniques in using large amounts of public money to override public opposition to the euro and in using the trade union bloc of votes to override popular opposition to Labour's crony candidate for the leadership in Wales?

Mrs. Beckett: No.

Mr. Gerald Howarth: The Leader of the House will know that she has a responsibility to protect the interests of Back Benchers. May I therefore add to the calls made by my right hon. and hon. Friends that there should be a full debate—not only during the Budget debate, but in Government time—so that the House may properly consider what is unquestionably the most momentous decision to be made by a British Government in decades, if not centuries: surrender of the pound sterling in favour of a foreign currency?
The right hon. Lady should not be so contemptuous of my hon. Friend the Member for New Forest, East (Dr. Lewis). We are talking about serious matters. Palming us off with the suggestion of raising them during the Budget debate is not worthy of her or her position. I advise her to reconsider, given her responsibilities to the House.

Mrs. Beckett: With respect, I did not palm anyone off. I shall be astonished if the Conservatives do not take the opportunity of the Budget debate to allude continually to those issues. Today's statement was about practical preparations to enable us to join the single currency should the British people decide at some point that we wish to do so. The notion that that is the most momentous announcement made in the House for centuries is extraordinary. Those of us who recall the announcement that we were to join the European Union, never mind the whipped decisions to join the European single market and give up the veto—all decisions taken by Conservative Governments—will view the hon. Gentleman's remarks with astonishment.

Mr. Edward Garnier: Will the right hon. Lady bear in mind the points made by her right hon. and hon. Friends about Iraq? If she cannot find time for a full debate on that, will she ensure that the Foreign Secretary comes to the House to make a statement as soon as he gets back from the Kosovo peace talks? This is a matter of huge national importance, and I invite the right hon. Lady to pay greater attention to the comments of her hon. Friends.

Mrs. Beckett: I am grateful to the hon. and learned Gentleman for raising that matter, because it enables me to correct something that I said in response to heckling by my hon. Friend the Member for Kelvin. I referred to the purchase of arms, but I meant the expenditure of money on the Iraqi armed forces. I shall bear in mind the hon. and learned Gentleman's request for a statement, but I remind him that there was an opportunity to raise the issue at Defence Question Time yesterday.

Mr. Garnier: That is not the point.

Mrs. Beckett: This is business questions, when hon. Members can ask for opportunities to raise matters that there has not so far been an opportunity to raise.
There was an opportunity to raise this issue only yesterday at Defence Question Time. My right hon. Friend the Foreign Secretary seeks meticulously to keep the House informed, but I suspect that, should he come to the House to make a statement in the near future, it is possible that Kosovo will be more immediately on his mind than Iraq.

Mr. Donald Anderson: My right hon. Friend will be aware that the House always takes seriously the leaking of Select Committees or House reports. She will also be aware that our hon. Friend the Member for Dundee, West (Mr. Ross) volunteered to the Foreign Affairs Committee this morning that he had leaked an early draft of the Committee's report. Will she confirm to the House that the appropriate procedure is that adopted by the Foreign Affairs Committee this morning? The matter should be referred to the Liaison Committee, which is meeting on Thursday this week. It will report back to the Foreign Affairs Committee and thence, probably via this House, to the Privileges Committee. The report of the Privileges Committee, after evidence has been taken, will be debatable in the House.

Mrs. Beckett: My hon. Friend is entirely right. The proper procedure, laid down in "Erskine May", provides for his Committee to discuss the matter and for it then to go to the Liaison Committee. I think—I am speaking from memory—that the proper course is for the Liaison Committee to send any matter that it thinks should be reported to the Privileges Committee. I am not sure that it goes via this House, but I shall check that. My hon. Friend is right: there is a proper procedure to be followed. I was confident that his Committee would follow it.

Mr. Crispin Blunt: Yesterday, the Home Secretary drew attention to the distinction between run-of-the-mill statements and other statements. Will the right hon. Lady be able to tell us which are run-of-the-mill statements before they are made? If not, will she ask Ministers to make their statements to this House first, with no briefing around them beforehand?

Mrs. Beckett: The hon. Gentleman's question is based on a false premise, because that was not what my right hon. Friend the Home Secretary said. I am sorry to tell the hon. Gentleman that I listened carefully, and my right hon. Friend said that there was a distinction—however much one might deplore it—between the leaking or other disbursement of relatively run-of-the-mill documents, such as Green Papers or White Papers, and the leaking of the report of a judicial inquiry, which is not in any way—[Interruption.] I suggest that Opposition Members take this seriously. A judicial inquiry is, in itself, a serious matter. The report is not a Government document, or a Government policy facing criticism. It is the report of a judicial inquiry in which the Government's only role was to set up the inquiry so that the matters could be examined. The Government have nothing to defend or to be concerned about in terms of the publication and leaking.
As for the hon. Gentleman's desire to have matters reported to the House first, I entirely share it. I would simply say that, given that the action yesterday of the right hon. Member for Sutton Coldfield (Sir N. Fowler), the Conservative spokesman, was to deplore the Home


Secretary's action in launching an injunction in an attempt to protect the interests of the House, I take his exhortations with a pinch of salt.

Mr. John Bercow: Given the breath-taking inadequacy of the statement from the Prime Minister which the House has just endured, will the Leader of the House find time for a statement next week by the Chancellor of the Exchequer, in which he is able, once and for all, to commit the Government to publish a White Paper on the economic, political and democratic implications of abolishing the pound? Does the right hon. Lady understand that the publication of such a White Paper would enable the Chancellor to declare whether he agrees with the former Spanish Prime Minister Felipe Gonzalez that the European single currency is the greatest abandonment of sovereignty since the foundation of the European Community? Moreover, it will enable the Chancellor to explain why he believes that the control of the British economy should be given up permanently to people whom we do not elect and cannot remove.

Mrs. Beckett: No doubt, there will come a time when my right hon. Friend the Chancellor of the Exchequer may publish documents dealing with those issues, but, since he is supposed to be publishing his Budget in the relatively near future, I doubt whether he is working on those at the moment. As for the hon. Gentleman's reference to the breath-taking inadequacy of the statement, I have observed—as, I am sure, has the House—that there is no statement that has yet succeeded in taking away his breath.

Mr. Andrew Lansley: May I reiterate my request to the Leader of the House, made on 4 February, that she arrange for a statement by the Secretary of State for Health on the progress of the royal commission on long-term care which—she will recall from the Health Secretary's statement on 4 December 1997—he confidently expected would report within 12 months, and which is now more than two months late?

Mrs. Beckett: I will bear in mind the hon. Gentleman's request, which I will draw to the attention of my right hon. Friend the Secretary of State for Health, who I am confident will be anxious to publish whatever he can as soon as he can.

Points of Order

Mr. Tam Dalyell: On a point of order, Mr. Deputy Speaker. May I raise a gentle point of order on behalf of a minority—a quartet of us? I refer to the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), my right hon. Friend the Member for Chesterfield (Mr. Benn), my hon. Friend the Member for Glasgow, Kelvin (Mr. Galloway) and me. We have no more wisdom than anyone else in this House, but it so happens that we are the four who have actually been to Iraq and have seen the holocaust. There are 560,000 dead children, and we have seen the pictures on the front of The Tribune newspaper. When one sees—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I must equally gently remind the hon. Gentleman—who has long experience in the House—that there are other opportunities to pursue a matter of argument. That is not a point of order for the Chair.

Mr. Shaun Woodward: Further to that point of order, Mr. Deputy Speaker. You will be aware of the resignation this morning of the hon. Member for Dundee, West (Mr. Ross), following his leak to the Foreign Secretary of a Select Committee document in January. You will also be aware of a number of written questions to the Foreign Office asking when exactly it was shown drafts or amendments of the Sierra Leone report. The answers given have at best shown grave discrepancies, and the answer given to my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan) last week by the Minister of State, the hon. Member for Manchester, Central (Mr. Lloyd), could have led hon. Members to believe that the Foreign Office had no sight of any document before 8 o'clock on the day of the embargo.
In the light of the resignation, and the admission this morning by the hon. Member for Dundee, West that he had shown a copy of the draft report to the Foreign Secretary one month before publication, is it not your view that the Foreign Secretary is not only complicit but should come to the House to make a statement? Has he applied to make such a statement?

Mr. Deputy Speaker: On the latter point, no; but it is not a matter for the Chair to have a view on. The hon. Gentleman's point of order was presaged by a question from the hon. Member for Spelthorne (Mr. Wilshire) and, in the course of exchanges, the Chairman of the Foreign Affairs Committee, the hon. Member for Swansea, East (Mr. Anderson), set out the exact position. I understand that the matter is already being handled by the Committee and, following the due process, the matter may come before the House at some subsequent time.

Mr. David Heath: Further to that point of order, Mr. Deputy Speaker. Is there not a clear distinction between the procedure that the Foreign Affairs Committee must adopt, and that has quite rightly been put in train with the Procedure Committee, to deal with the leaking of the report, and the reply to the hon. Member for Chesham and Amersham (Mrs. Gillan), which was disingenuous in suggesting that the first sight the Foreign Secretary and his Ministers had of the report


was on the morning of its publication, when it is clear from the statement by the hon. Member for Dundee, West (Mr. Ross) that the Foreign Office had sight of the report a month earlier? Have the Foreign Secretary or any of his Ministers given any indication to the Chair that they want to correct that misapprehension?

Mr. Eric Forth: Further to that point of order, Mr. Deputy Speaker. Accepting—you have already guided us most helpfully on the point—what the hon. Member for Swansea, East (Mr. Anderson) has said about the role of the Foreign Affairs Committee in investigating its side of the matter, which it properly must do, can you advise the House whether there is anything that we can do to find out what the role of the Foreign Office was in the matter?
The role of the Committee and its members will be properly investigated, as the Chairman has said, but how can we pursue the role of the Foreign Office, especially in the light of what my hon. Friend the Member for Witney (Mr. Woodward) and the hon. Member for Somerton and Frome (Mr. Heath) have said about the inadequacy—I put it no more strongly—of recent Foreign Office answers?

Mr. Deputy Speaker: Those are not points of order on which the Chair can rule. I have answered the question whether notification of any statement has been received. No such notification has been received. When Ministers make statements is entirely a matter for the Government. There are, of course, many ways open to right hon. and hon. Members to raise points of debate, and I am sure that it is not beyond their ingenuity to find those ways if there are points of argument that they want to pursue.

Sir George Young: Further to that point of order, Mr. Deputy Speaker. Would it be

in order for the Minister of State, the hon. Member for Manchester, Central (Mr. Lloyd), to make a statement to clarify the apparent discrepancies that have been pointed out?

Mr. Deputy Speaker: I am sure that the right hon. Gentleman knows that that again is not a matter on which the Chair can rule. The Leader of the House will have heard the request that was made, and—

Mr. Forth: Not here.

Mr. Deputy Speaker: It was made at an earlier stage.
The Leader of the House will have the matter drawn to her attention, but it is entirely a matter for the Government to decide when and which Ministers make statements to the House.

Mr. Crispin Blunt: On a point of order, Mr. Deputy Speaker. The reputation of the House is largely in the hands of the conduct of its Members, and a more onerous responsibility falls on the senior Members, and especially the Prime Minister. In response to a question from the right hon. Member for Chesterfield (Mr. Benn) earlier today, the Prime Minister made a remark—I am not certain that it will have been picked up by the reporters—about the cracked Wedgwood argument. He then failed to address the points that were put to him. Could you draw his attention to the fact that such conduct does not do the reputation of the House any good?

Mr. Deputy Speaker: I did not hear the remark and I cannot make a retrospective ruling as to whether points of propriety are raised. There can be no further point of order on which I can rule. We now come to a ten-minute Bill.

Fuel Safety

Mr. Fraser Kemp: I beg to move,
That leave be given to bring in a Bill to require the installation of carbon monoxide detectors in certain premises; to raise public and professional awareness of the dangers of carbon monoxide poisoning; to make new provision with respect to the maintenance of fuel appliances; and for connected purposes.
Thank you, Mr. Deputy Speaker, for giving me the opportunity to present this Bill. I became involved in this important subject following the death of a constituent who was 19 years old, a student at Durham university and a talented and admirable young woman. She died in a rented house in multiple occupation because of the inadequacies of the heating equipment. That was the second death of a 24-year-old student in my constituency, because two years previously another student, Glen Haliday, died.
Thank my hon. Friends and other hon. Members who are present in the Chamber, many of whom are here because they have had similar experiences in their constituencies. They have had to sit down with the parents and loved ones of those who have lost their lives through carbon monoxide poisoning. I know that there are people observing our proceedings today who have also recently lost loved ones through similar terrible tragedies.
The Bill is in memory of those who have died, as well as an attempt to prevent such deaths in future. It is a sad fact that, statistically, every Member of Parliament will at some stage in their parliamentary careers have to deal with a similar tragedy in their constituencies. Recently, in the constituency of my right hon. Friend the Member for Chesterfield (Mr. Benn), four people—a mother, father and two young sons—died of carbon monoxide poisoning.
The Bill is a reasoned, long-overdue and sensible measure. That is endorsed by the support that it has received from my hon. Friends and from Conservative Members, Liberal Members and the minor nationalist parties. I am grateful to all those who have supported the Bill.
The Bill is in three sections. The first would provide, initially, for the installation of carbon monoxide detectors in houses in multiple occupation. The second part would place a duty on the Government to raise public and professional awareness of the dangers, and the third would make new provision for the maintenance of heating equipment and introduce tougher penalties for those who abuse it.
I accept that carbon monoxide detectors are a second line of defence, but they are important. We must ensure that all equipment in the home works correctly, but detectors should be installed as a second line of defence. I would like to see in Britain the same culture for carbon monoxide detectors that we have for smoke alarms. Twenty years ago, smoke alarms were costly and rare. Today, they are relatively cheap and many houses in Britain are much safer because of their installation. We should develop the same attitude to carbon monoxide detectors. That would help to reduce their price, although they are relatively inexpensive at the moment at around £30.
Before I came into the Chamber at 2.30 pm, I talked with a Mrs. Smith whose husband tragically died 10 days after their house had been checked by an engineer.
Everything appeared to be in working order, but carbon monoxide—an evil, silent and insidious killer—had crept through and killed Mr. Smith. So detectors are important.
Another case of which I am aware involves a Mr. Nigel Cullen, who had read about the existence of carbon monoxide detectors. Part of the problem is that not many people know that audible detectors can be purchased, as can other equipment that will shut down the supply if it detects the gas. Mr. Cullen read about the detectors in the Nottingham Evening Post and decided to buy one, which he sent to his daughter, a student at Newcastle university.
Mr. Cullen's daughter shared a house with four other people. As soon as the detector was fitted in that house, it registered carbon monoxide present at 10 times the danger level. There is no doubt that that detector at least prevented Mr. Cullen's daughter and her housemates from becoming seriously ill, and it may have saved their lives.
The press has been criticised in the House over the past couple of days, but some newspapers with which I have been involved—such as the Nottingham Evening Post, the Sunderland Echo, The Northern Echo and The Journal—have played an important part in recent months in raising public awareness and making sure that lives are saved.
My second intention with the Bill is to raise public awareness. I am grateful to this Government, and also to the previous Government, for spending some money on television advertising. A campaign is running at present, and hon. Members may have seen it over recent weeks. That is another factor in helping to raise awareness, as is the inclusion in 20 million gas bills of a leaflet with a helpline number which people can contact if they are worried about the problem. Public awareness is important, and Parliament should place a duty on Secretaries of State to ensure that major safety campaigns take place.
Professional awareness is also important, especially in the health service. We must ensure that there is good co-ordination between health service professionals. One of the problems is that carbon monoxide poisoning is very slow. Because its symptoms include headaches and sickness, it is often mistaken for influenza and can be hard to identify, even for people in the medical profession. The question of public and professional awareness is therefore very important.
Finally, the Bill would require landlords to ensure that equipment is checked annually. Such maintenance is vital: no one would get in a car that had not been MOT-ed, for fear that it was dangerous. We should have the same attitude to equipment in the home, which should be installed by qualified people. Landlords who want to install such equipment on the cheap, and play God with people's lives, should suffer the consequences.
Legislation is not tough enough, and we need to send out the message that we will not settle for anything less than the highest standards, which are needed to protect the most vulnerable people in our society. I accept that carbon monoxide poisoning does not respect class or housing tenure, but the evidence is that those at the bottom end of the housing ladder are more likely to suffer from it.
With the indulgence of the House, I should like to make a further point. When we think of carbon monoxide poisoning, we tend to think in terms it happening as a result of faulty gas equipment. However, the problem is


not confined to gas equipment. On 5 February, I received a letter from a woman with whom I used to work before I became a Member of Parliament. The letter states:
Dear Fraser,
On January 7th 1999 my partner, Michael Price, tragically died of carbon monoxide poisoning. He was only 45 and we were looking forward to marrying and having a family. The source of the poisonous gas was a blocked flue from a stove in his sitting room, which was burning anthracite. I applaud your efforts to introduce awareness of the need for safety and the extended use of alarms to detect carbon monoxide. I would especially urge you to take this opportunity to point out very strongly that gas appliances are not the only potential source of carbon monoxide. Too many people are unaware that the burning of any fuel which creates a carbon deposit"—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I am sorry to interrupt the hon. Gentleman, but he has used up his time. In view of the House's crowded schedule for the rest of the day, I must ask him to finish.

Mr. Kemp: Thank you, Mr. Deputy Speaker. Let me simply say that carbon monoxide can come in many forms. I ask for the House's support.
Question put and agreed to.
Bill ordered to be brought in by Mr. Fraser Kemp, Mr. Alan W. Williams, Mrs. Llin Golding, Mr. Vernon Coaker, Mr. Neil Gerrard, Mr. Paul Keetch, Ms Jackie Lawrence, Mr. David Ruffley, Mr. John Swinney, Mr. Stephen Hepburn, Mr. Roy Beggs and Mr. John Cummings.

FUEL SAFETY

Mr. Fraser Kemp accordingly presented a Bill: And the same was read the First time; and ordered to be read a Second time on Friday 16 April, and to be printed [Bill 49].

Orders of the Day — Welfare Reform and Pensions Bill

[Relevant documents: The Fifth Report from the Social Security Committee, Session 1997–98, on Pensions on Divorce (HC 869) and the Government's Response thereto (HC 146 of Session 1998–99.]

Order for Second Reading read.

Mr. Deputy Speaker (Sir Alan Haselhurst): I should inform the House that Madam Speaker has selected the amendment in the name of the Leader of the Opposition, and that Madam Speaker has imposed a 10-minute limit on Back-Bench speeches.

The Secretary of State for Social Security (Mr. Alistair Darling): I beg to move, That the Bill be now read a Second time.
The Bill marks another step in our modernisation of the welfare state to ensure that it can meet the needs of the next 50 years. Across Government, we are taking action to tackle the causes of social and economic failure. We are investing £40 billion extra in health and education, reforming the tax and benefit system to make work pay and tackling the scandal of poverty pay with the first ever national minimum wage. We are also helping 6.5 million families with the biggest ever rise in child benefit. In short, we are taking action today to deal with immediate problems, but our central objective is to confront the causes of social and economic failure in the future.
In this last year of the 20th century-50 years after the start of the welfare state—it is a scandal that a child can still be born poor, live poor and then die poor. We are tackling the poverty of expectation that leaves a generation of children expecting nothing better for themselves than a lifetime on benefit. We know too well the effect that years of unemployment can have on individuals. It demoralises them, and it is debilitating. That is why we need a radical change in culture, both for individuals and for Government. We are tackling the poverty of opportunity that allows people to be written off, or, sometimes, to write themselves off.
The Bill is an essential part of our strategy. Benefits alone cannot tackle this failure. It is easy for the Government to send out a giro, but a giro will not get anyone a job, or improve their skills. Benefits can, of course, treat the symptoms of poverty, but they cannot tackle its causes. Complacency—an acceptance of social and economic failure as part of the natural order of things—would be a betrayal of the generations that follow us. We are determined to act, to make a difference and to be judged on our actions.
Today, we take reform a step further in four key areas. It may be helpful to the House if I set out how I intend to deal with the Bill.
First, we are introducing a radical package of measures to keep people in touch with the labour market, including the single gateway and the new employment zones. Secondly, we are modernising disability benefits so that they will provide more help for disabled people in greatest need, as well as providing opportunities for disabled people who want to work.
Thirdly, we are modernising and extending entitlement to bereavement benefits to help families with children who need it most. Fourthly, we are starting the process of pension reform, to ensure that the system provides security in retirement for future pensioners and allows pension sharing on divorce.
In addition, the Bill provides for a number of other measures, including a new housing benefit pilot and a power to incur expenditure to enable my Department to acquire the information technology equipment that it will need if it is to deliver a modern service and to undertake preparatory work for the possible introduction of the euro, as outlined by my right hon. Friend the Prime Minister earlier this afternoon.

Mr. Jonathan Shaw: My right hon. Friend mentioned the single gateway, which has been received by constituents whom I have consulted and representative groups in my area with considerable enthusiasm. Will people with disabilities who attend the interviews be treated with dignity and respect, so that we do not have a repeat of the approach taken under the Tory benefit integrity project? Can he also give an assurance that the staff doing the interviews will be properly trained?

Mr. Darling: Yes. Lest my hon. Friend and others thought that I had finished with the Bill, having gone through the four main points, and was going to talk about the euro for the rest of the afternoon—no matter how tempting that would be because of the reaction of Conservative Members—I was about to turn to the single gateway. I will deal with the points that he raised and, if I miss any of them out, I will certainly give way.
However, I do not want to be denied my pleasure on the subject of the euro. One final point is that preparation for it and the delivery of a host of other measures within the Department clearly will depend on our having the IT equipment. The reform of child support, which will come forward in the next year or so, the single gateway and so forth will all require new IT equipment. At this stage, I will merely say of the clause that not only is Treasury approval required before detailed work is undertaken, but expenditure can be undertaken only if approved by the House.

Mr. Clifford Forsythe: Will the Secretary of State give way?

Mr. Darling: I promise the hon. Gentleman that I will deal with the rest of the Bill, but if he wishes to intervene on this point, I will certainly give way.

Mr. Forsythe: It is an important point for Northern Ireland. Does the Bill in its entirety extend to Northern Ireland?

Mr. Darling: The hon. Gentleman will see at the end of the Bill those parts that apply to Northern Ireland. He will also be aware that, as part of the Government's settlement following the Belfast agreement last year, it is

envisaged that there should be a level playing field throughout Great Britain for national insurance. That is what employers and business want.

Mr. John Hayes: Will the right hon. Gentleman give way?

Mr. Darling: Not at the moment.
Large parts of the Bill, excluding the single gateway, apply to Northern Ireland. Only certain parts of pension sharing on divorce, which I will deal with later, will apply there as family law in Northern Ireland is different from that in Scotland and in England and Wales.
I am conscious of the fact that a time limit has been imposed and that a large number of hon. Members want to speak, so I will deal with the single gateway, which is in many ways one of the most important features of the Bill. It reflects a radical change in approach and culture in the benefits system.
Clause 47 introduces the new single gateway for people of working age. As I said, far too many people are written off or have allowed themselves to be written off and have resigned themselves to a lifetime on benefit. Too many children are growing up in workless households and have come to expect nothing better for themselves. The Government need to tackle that poverty of expectation.
For example, the present system assumes that in many cases lone parents will stay on benefit for 16 years or longer. If a lone parent wants to work, she is on her own—without access to training, support or advice. The new deal takes a new approach. It provides active support not merely for lone parents, but for people with disabilities, as well as for the long-term and young unemployed. It is worth noting that more than 210,000 young people are already on the new deal and that 60,000 people, who would have been on the dole if we had not taken that action, are now in paid employment.

Mr. Eric Forth: What will happen if the lone parent refuses to work, or does not want to do so?

Mr. Darling: One thing is clear: we will not compel lone parents to work—

Mr. Forth: Oh!

Mr. Darling: That should not be news to the right hon. Gentleman. He is in the House often enough, although he may not listen to what is said. We have made it abundantly clear that, as regards the gateway, everyone of working age coming through the benefits system will be required to attend an initial interview to be told their options. However, we have made it clear that lone parents and the disabled will not be compelled to take a job.

Mr. John Bercow: Will the Secretary of State give way? [Interruption.]

Mr. Darling: I am glad to have the support of Opposition Members. I shall give way in a moment. The point is that the single gateway builds on the new deal, because it provides everyone of working age with advice on their options in work, training and child care. Everyone of working age entering the benefits system will, for the


first time, get the help that they need and have the right to expect. In turn, they have a clear responsibility to take up that help, so, as a condition of receiving benefit, they will be required to take part in an interview to find out about the opportunities that are open to them.
My hon. Friend the Member for Chatham and Aylesford (Mr. Shaw) asked whether we will be sensitive to people faced with particular difficulties. Of course we shall—we want the single gateway to work. One of the aspects of the new deal by which I am most struck is that those who have been on it speak openly about the qualitative difference between the service they receive now and the service they used to receive when the Tories were in office. There is another difference—

Mr. Bercow: Will the right hon. Gentleman give way?

Mr. Tom Clarke: Will my right hon. Friend give way?

Mr. Darling: I shall certainly give way, both to the hon. Gentleman and to my right hon. Friend, but let me finish my point.
Unlike what happened in the past, we now offer help through the national child care strategy; the working families tax credit, which helps to make work pay; and the minimum wage, which the Conservatives oppose and have pledged to repeal, but which will get rid of the poverty arising from low wages. There is help available now that was never available in the past, and having a personal adviser means that people can be taken through the gateway system and have their options explained to them individually. I give way to my right hon. Friend the Member for Coatbridge and Chryston (Mr. Clarke) first, and then to the hon. Member for Buckingham (Mr. Bercow).

Mr. Clarke: My right hon. Friend is embarking on a herculean task and we wish him well. However, may I pursue the point raised by my hon. Friend the Member for Chatham and Aylesford (Mr. Shaw)? We all understand my right hon. Friend's objectives, but I am sure that he understands the situation that he has inherited. Disabled people, including some of my constituents, are extremely worried about the adjudication—often medical adjudication—that may lead to benefits being cut off. Will he give an assurance that a more professional approach will be taken to such cases? Has he made progress on the issue of the time that people wait for their appeal?

Mr. Darling: We are making progress on the issue of appeals. I recently met Judge Harris, who is in charge of the independent tribunal service, and the chief executive of the new agency that the Government are establishing. I impressed on them that the current delays—the average is seven months—are completely unacceptable, especially because most cases deal with people on extremely low incomes, who do not have the leeway for survival that a well-off person has. We are taking a number of steps—I am bound to say to say that some are controversial, for example, the composition of tribunals—because the current position is not satisfactory. It might be a cliché that justice delayed is justice denied, but I am genuinely concerned.
On the quality of medical examinations, I shall speak later about the ending of the all-work test and about its replacement. All of us have had brought to our attention

constituency cases where matters were unsatisfactory. We are determined to address such cases, because the integrity of the system means that people have to have confidence in the decisions taken.

Mr. Bercow: rose—

Mr. Darling: Lest the hon. Gentleman becomes over-excited, I give way.

Mr. Bercow: The right hon. Gentleman is in no danger, but I am grateful none the less. When someone does not give good cause for failing to attend an interview under the single work-focused gateway, how quickly will the decision be taken to deny that individual benefit, and will the denial be absolute or partial?

Mr. Darling: We have made it clear that, if someone enters the benefits system, one of the conditions of receiving benefit is attendance at an interview. I should have thought that the hon. Gentleman would, on behalf of his constituents, be more interested in what we are doing to help people than in focusing on the negative aspects.

Mr. Bercow: Answer the question.

Mr. Darling: I have answered it, but for the avoidance of doubt, let me repeat my answer. It will be a necessary condition of receiving benefit that a person attends an initial interview. In cases where there is good cause for failing to attend, for example, when a person has recently been bereaved, or—

Mr. Bercow: indicated dissent.

Mr. Darling: The hon. Gentleman might not be bothered about those things, but it is important that we are sensitive to the requirements of the public. When there is good cause, the interview can be deferred so that, when the person attends the interview, he or she is in the right frame of mind to hear what options are available.

Mr. Tony McWalter: Will my right hon. Friend give way?

Mr. Alan Simpson: Will my right hon. Friend give way?

Mr. Darling: I shall give way, but hon. Members should not blame me if one or two of them are cut out of tonight's debate. I give way first to my hon. Friend the Member for Hemel Hempstead (Mr. McWalter).

Mr. McWalter: I have written to my right hon. Friend about this point, but I seek further clarification now. Subsection (6) of clause 47 says that people might not be asked to go for an interview, subject to various regulations. That is an important point, as some people have conditions that would be exacerbated by the offer of an interview—I refer particularly to those who suffer from manic depression or ME. I seek my right hon. Friend's assurance on that important point. In saying that everyone will be asked to present for an interview, will he emphasise that the operation of subsection (6) may mean that not quite everyone must attend?

Mr. Darling: My hon. Friend is correct—he has raised this matter before. Like our approach to the new deal,


we are anxious to ensure that people coming through the system view the single gateway as helpful. We know that some people are reluctant to attend interviews and are determined—for not very good reasons—not to co-operate. We must be tough with them. However, there are other people who suffer from particular disabilities—I mentioned the cases of someone who has been recently bereaved or of a lone parent who has difficulty with child care arrangements—and we must be sensitive.
The Bill gives us the power to make regulations so that we do not get into a situation where no reasonable person could justify our request. I assure the hon. Member for Buckingham and my hon. Friend the Member for Hemel Hempstead that we are determined to be reasonable in our approach because we want it to work. We know that we must take fairly firm action with some people. However, it would be unreasonable to tell others—who have perfectly good reasons for refusing—that they must present for an interview within three days. I shall give way to my hon. Friend the Member for Nottingham, South (Mr. Simpson) as he was so anxious to intervene.

Mr. Alan Simpson: I thank the Secretary of State for giving way; I hope that he will find my intervention helpful. Opposition Members are seeking to portray the measure as an attack on the poor and the unemployed.
I am the chair of the inter-agency monitoring group on the new deal in Nottingham, and we have discovered that compulsion is not the problem. The most important feedback that we have received is that the morass of means-tested benefits we inherited from the Tories has left people in danger not of being part of a something-for-nothing society, but of working for nothing for some time because of complications in the operation of the wage and benefit systems. In Committee, will my right hon. Friend look carefully at the changes that he is introducing to see whether they will extricate people from dependency on means-testing? Will he consider also the problems of those in low-wage employment? Unless we alter the taper, there is a danger that they will face a marginal tax rate of 95p in the pound.

Mr. Darling: I knew that my hon. Friend was an office bearer in several organisations, but not in the Nottingham group. I take at face value his assurance that he is being helpful.
I shall explain a number of things. My hon. Friend's most important point concerned the position of people who are on benefit and who find that work does not pay because they lose too much money for precisely the reasons that he gave. We introduced the working families tax credit—which the Conservative party opposes and has pledged to repeal, despite the fact that it will cost many people up to £17 a week in an effective tax rise—because we want to ensure that people coming off benefit and into work see increases in their pay packets. That is one of the most significant reforms of the benefit and tax systems that this country has seen in the past 25 years. I believe that it will be welcomed warmly, especially when people see it beginning to work upon its introduction in October next year.
My hon. Friend is right: we must examine many parts of the benefit system—for example, housing benefit. Some measures in the Bill will encourage work. We have

much more to do and this is not the last word on welfare reform—far from it. As to means-testing—I dare say that this point will be raised in the course of the evening, if not in further interventions in my speech—there has been a growing disparity in incomes over the past 20 years, and possibly before that. The Government make no apology for the fact that, on our election, we went out of our way—especially in the Chancellor's first two Budgets—to provide additional help to those at the lowest end of the income scale: the disabled and pensioners. That involves having regard to people's income and means, and I make no apology for that because we have a lot of work to do in catching up with and helping those people who have suffered at the hands of the Tories. Conservative Members may complain about means-testing today, but they doubled it during their 18 years in power.

Mr. Hayes: Will the right hon. Gentleman give way?

Mr. Darling: Not now. I shall make some progress and then I shall give way.
The single gateway is part of a wider strategy to ensure that people have the opportunity to work. The Bill introduces two further measures to help people into work. Clause 48 requires joint claims to jobseeker's allowance from young couples who do not have children, so that both will have access to support and advice from the Employment Service and, if they have been unemployed for more than six months, to the new deal for young people. Clause 49 provides for the new £112 million programme of employment zones to cut through red tape and focus resources on areas that suffer from persistently high unemployment, such as those to which my hon. Friend the Member for Nottingham, South referred.
My right hon. Friend the Secretary of State for Education and Employment is taking steps to ensure that, using the new personal job accounts, we shall be able to help unemployed people aged 25 or over to improve their skills and get extra help in finding work.
By pioneering a different approach, we are doing far more to help people get into work. Of course, that is just one part of our overall strategy. We are determined to do more for people who cannot work, so the Bill also reforms and modernises support for disabled people.
We consulted on all our proposals. More than 300 responses were received from local and national organisations and individuals, including Members of the House. The disability benefits forum, which the Government set up in 1998, played a particularly important role in that consultation. Even though members of the forum did not agree with us in a number of key areas—which is not surprising in some cases—their advice was helpful and they have asked to meet us again during the Bill's passage through Parliament.
We are doing a great deal to improve the opportunities and support available to disabled people, but before I describe the ways in which we are doing so, I shall give way to the hon. Member for South Holland and The Deepings (Mr. Hayes).

Mr. Hayes: The right hon. Gentleman will know that I am, proudly, a joint chairman of the all-party disablement group. Although the forum was welcomed by all members of the group, he must surely acknowledge, and apologise to the House for, the fear and trepidation caused by a


number of ill-judged statements by those on the Government Benches, including Ministers. Those statements have severely damaged the expectations of disabled people and picked out and frightened the most needy and vulnerable. I hope that the Secretary of State will take this opportunity to dissociate himself from those remarks and apologise for them.

Mr. Darling: I find the hon. Gentleman's remarks a bit hard to take. He should perhaps read his deputy leader's speeches to Tory party conferences in the late 1980s and 1990s. The hon. Gentleman was not a Member of the House when the benefit integrity project was set up, but he might care to remember which Government introduced that.
We are taking measures across the board that will go a long way towards helping people with disabilities. For example, we are investing in the new deal for disabled people and introducing the disabled person's tax credit, which, from October, will provide a guaranteed minimum income of at least £150 a week for a single disabled person moving from benefit into work. The new disability income guarantee is worth at least £128 a week for the most severely disabled people under 60 who are getting income support. We are building on our commitment to comprehensive civil rights with the Disability Rights Commission.
All those reforms are an essential part of our overall approach. We want to do more to help people into work, but we are conscious of the fact that there are many people who cannot work. I make it clear today, as I did when I made my initial statement on these matters last October, that no one receiving benefit will lose their benefit entitlement as a result of the changes when they are introduced. We want to provide opportunity where once there was none.
I shall draw attention to a number of issues that I know hon. Members will want to debate. Clause 50 ends the incapacity benefit all-work test and the assumption that everyone on incapacity benefit cannot and will not work. The new assessment introduced by the Bill will consider what people can do, not just what they cannot. No disabled person will be forced into work, but together the single gateway and the new assessment will help disabled people to identify their options and plan for a return to work, where that is possible.
If we want to do more for the people who need help most, we have to ask ourselves how we use our resources, and we are making changes to the incapacity benefit regime. Clause 52 introduces a fairer partnership between the state and individuals by changing the way that occupational or personal pensions are treated for incapacity benefit.
In 1953, only 28 per cent. of people had an occupational pension. Today, 86 per cent. of men and 77 per cent. of women working full-time have one. As a result, about a third of people receiving incapacity benefit also get payments from an occupational or personal pension and some of them receive a pension of more than £150 a week—yet incapacity benefit was intended to replace lost income from work. It was never intended as a top-up to income in early retirement, which is what it has become in many cases. A quarter of men over 60 are on incapacity benefit and many of them were channelled into claiming that benefit by the Conservatives in the 1980s to hide what was happening with the unemployment figures.
We want to reward thrift and saving. People should be rewarded for making their own pension provision, so under our proposals people will be able to keep the first £50 a week of any early retirement pension paid, but their incapacity benefit will be reduced by a taper of 50p for every additional £1 of pension received. That is reasonable when one bears it in mind that people would need an income from their occupational pension of nearly £10,000 a year before they lost all their incapacity benefit.
I can tell the House also—this matter was raised during consultation—that the £50 threshold will be kept under review to ensure that it remains at a fair and reasonable level.

Dr. Ian Gibson: First, does my right hon. Friend agree that removing the 14 physical descriptors would be major step forward in scrapping the all-work test? Descriptors that define how people can lift sacks of potatoes and cartons of milk are not consistent with the modern medical world. They must be removed if the Government are to introduce factors to determine what people can do.
Secondly, will my right hon. Friend consider the iniquity of medical doctors receiving £78 for each session, the duration of which is ill-defined and which often last for between one and five minutes? By my calculations, by doing those tests five days a week and seven months a year, they can earn about £140,000. It is always the same doctor whom clients in my surgery say they have met. Is not £140,000 a lot of money for taking a few pence away from people who are severely inconvenienced?

Mr. Deputy Speaker: Order. Interventions are becoming very long and many hon. Members are waiting to speak. I ask hon. Members to be brief in their interventions.

Mr. Darling: I shall try to be brief in my reply.
If my hon. Friend has a doctor in his constituency who is earning £140,000 a year for seeing patients for one minute at a time, I ask him to write to me and I shall deal with that. I should be interested if someone were doing so because I certainly have not come across such a case. Perhaps everyone is keeping very quiet about it, but I should be surprised if that were so. My hon. Friend raised a second point about descriptors—

Dr. Lynne Jones: Will my right hon. Friend give way?

Mr. Darling: If my hon. Friend will contain herself, I shall give way in a moment. I am mindful of the fact that I have been speaking for nearly half an hour and I have by no means finished.
On descriptors, we have considered the medical side of the new personal capacity assessment. I have considered it on a number of occasions. My hon. Friend the Member for Norwich, North (Dr. Gibson) has a medical background and he will know that, whatever system is used for making assessments, it is always possible for someone to say that it is unsatisfactory and deficient in some respect.
We have compared the system with what happens in other parts of the world. Members of the disability benefits forum are also considering it. We want to get it right


because it is not in our interests to have a scheme that does not enjoy people's confidence. Introducing a scheme that has 100 per cent. support will be difficult, because in my experience anyone who falls foul of a scheme tends to find something wrong with it. People who get through a system tend not to think that it is too bad.
I gave an undertaking earlier that the medical test for incapacity benefit will remain the same, but we are adding the capacity test to ensure that we have a better chance of finding out what people can do rather than what they cannot do.

Several hon. Members: rose—

Mr. Darling: I shall give way to my hon. Friend the Member for Birmingham, Selly Oak (Dr. Jones) and then I shall speak for five minutes solid before I give way to somebody else.

Dr. Lynne Jones: My right hon. Friend's plans to means-test incapacity benefit will mean that someone who becomes disabled, let us say, in their late 40s—my age—who has saved for a pension will lose all entitlement to incapacity benefit if they have an income of about £9,300. That is about half average earnings. Will not such people feel absolutely betrayed because, even though they have paid national insurance contributions for 20 years or more, they will receive no benefit as a result of those contributions?

Mr. Darling: If we were starting from scratch—if there were no incapacity benefit scheme—I do not believe that we would now set up a scheme that ignored the fact that many people receiving IB have quite substantial incomes from their pensions. Perhaps my hon. Friend would ignore it, but I am afraid that I would not because, in any social security system, we must have regard to how much we can spend overall and where we spend it.
We could, and should, do far more to help people who need help, especially younger people who are disabled—I am about to outline measures that we are taking in that regard. It is scandalous that we have been paying so little to people who have been severely disabled. However, we can assist those who need our help only if, at the same time, we consider how we are spending our money overall.
I do not believe that my proposal in the Bill to create a £50 disregard so that anyone with a pension will always be £50 a week better off—the average payment is about £85—is unreasonable. There will always be a balance between what the state provides and what individuals provide. That has been a feature of our social security system for the past 50 years. I believe that the proposal for the disregard and the taper is reasonable. There is a further proposal—

Ms Joan Walley: Will my right hon. Friend give way?

Mr. Darling: Unless I make progress, no one else will get to speak. However tempting that might be, it would not be fair. However, I will give way to my hon. Friend later.
Clause 51 restores incapacity benefit to its original intention—helping people who lose their income when illness or disability causes them to stop work. We are strengthening the link between recent work and entitlement to IB by reforming the contribution conditions. We are determined to do more for carers, so we are making special provision for those getting invalid care allowance to ensure that they can still qualify for IB. We are also protecting people who have been off IB for a short spell and have not had a chance to rebuild their national insurance contributions, to ensure that they do not lose out.
I want to say a word about the new support that we are providing for severely disabled young people and children. Clause 56 applies, for the first time, the higher rate mobility payment of disability living allowance to severely disabled children aged three and four. That reform is worth more than £35 a week extra in new support for disabled people, and gives children and their families access to the Motability scheme.
We also want to provide better help for young people disabled early in life. Clause 53 gives young disabled people who claim before they are 20 a new entitlement to IB without requiring them to meet the usual contribution conditions, which is worth up to £25.60 a week extra and provides real help for those young disabled people who need it most.
One of the strongest arguments that several disability organisations made was that it would be wrong to penalise someone who is young, who is disabled, and who has stayed on after school to go into higher education or training. I accept that, so we shall table a Government amendment to raise the age limit for claiming IB for young disabled people who begin training or higher education before they are 20 to the age of 25.
All those reforms focus help on those who need it most—disabled young people unable to work and severely disabled young children.

Ms Walley: Does my right hon. Friend accept that there is concern that, currently, people undergoing medical examinations are not gaining entitlement to the benefit? When he reviews the medical examinations, will he consider how to ensure that there can be public trust in the new system that he sets up? A survey undertaken by the Stoke-on-Trent citizens advice bureau found that about 68 per cent. of people who had been refused incapacity benefit in the first instance were awarded benefit later. Will my right hon. Friend consider how trust might be re-established, given the contracting out of the medical examinations?

Mr. Darling: I entirely take my hon. Friend's point. I attach considerable importance not only to ensuring that the medical test is fair and seen to be fair, but to ensuring that we get benefits right first time. My hon. Friend mentioned a very bad feature of the social security system, which has been growing over the years: far too many awards are overturned on appeal because they were not right first time. Some of the changes that we have made will allow officials to put things right before they have to go through the appeal procedure. That relates to the point that my right hon. Friend the Member for Coatbridge and


Chryston made. In the past, a wrong decision had to be appealed, which sometimes took months. I am very conscious of that.

Dr. Brian Iddon: Will my right hon. Friend comment on the length of time between an interview when benefits have been awarded through the gateway and a recall interview? I see nothing in the Bill determining that.

Mr. Darling: That is not in the Bill, but regulations will be made specifying the trigger points for second interviews. It may help the House if I give an idea of the Government's thinking—as yet not finalised—on that. In any event, people should be seen after five years if they have not been in before. However, I shall give some examples. A person might be called for interview at the end of caring responsibilities; when they leave or take up part-time work; when they leave or start education or training; when we receive results of the new personal capability assessment, showing that the person is able to work; or when the youngest child of a lone parent enters primary or secondary school. At such a milestone event we could reasonably say to people, "Something has changed; come in and see what the options are."
I emphasise again that people who have been through the new deal, seeing a personal adviser, will know from experience that they are getting a qualitatively different service when they go in. The Department will be focused on how it can help people.
We are making regulations, and there will be ample time to discuss the matter in Committee—I do not know whether my hon. Friend the Member for Bolton, South?East (Dr. Iddon) has aspirations to serve on it.

Mr. Iain Duncan Smith: Will the Secretary of State give way?

Mr. Darling: This is the last time—I promise.

Mr. Duncan Smith: The right hon. Gentleman is talking about the amount of time that a person spends on benefit before they are likely to be seen or interviewed. Has he also considered, and will he be giving targets for, or indications of, the length of time between when a person is called for interview and when they are seen or expected to be seen?

Mr. Darling: The normal expectation is that, unless there is good cause of the type that I mentioned earlier, a person will come in for an initial interview within, let us say, three to four days of applying for benefit. Subsequent interviews will take place at milestones such as those that I have described. Regulations will be published and guidance issued to staff on when interviews should take place—how much notice people should get.
I emphasise to the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) that the Government want to ensure that, throughout the process, everyone's mind is focused on work, not benefit, and also focused on what help, and what additional training and skills, they might be able to get. The initial interview is therefore crucial, but the Bill makes provision for subsequent interviews to ensure that we do not prolong

the present situation, where someone can be left on benefits, in effect, for a lifetime, and nothing is done to help them. It is not good for them or for anyone else.
I shall now discuss bereavement benefits. I repeat that none of the changes will affect existing widows—widows over pension age—or war pensioners, but the current system needs reform. It is out of date. If we started afresh, we would not reinvent the present system. When widow's benefit was introduced more than 50 years ago, most women—certainly after marriage—did not work, whereas today seven out of 10 married women work, almost as many as the eight out of 10 married men who work.

Audrey Wise: Will my right hon. Friend give way?

Mr. Darling: I will give way when I have finished this passage.
The system helps many women on good incomes who have no children to care for, yet it does nothing for bereaved husbands struggling to bring up children. The current system is deficient in that it spends most on those who need it least. Forty per cent. of women getting that benefit are in the top half of the income bracket. Moreover, 75 per cent. of the money that we spend goes to women without dependent children, whereas 35,000 widows see nothing at all because their widow's benefit is deducted pound for pound if they happen to be on income support.

Audrey Wise: My right hon. Friend says that a great many women work, but he does not seem to take account of the fact that they are still largely congregated at the lower end of the wages table and that many of them work part time rather than full-time, or are on temporary work or in other disadvantaged jobs. Will he look at that again? One job does not simply equal another.

Mr. Darling: We have introduced the working families tax credit, underpinned by the minimum wage, precisely to tackle that problem, which my hon. Friend rightly raised for years while the Tories were in power—and nothing happened.
The Government's strategy has to be looked at right across the board. We are trying to deal with the problems of low pay and, in some cases, exploitation, particularly of women who work for ridiculously low sums. We are also ensuring that we have fairer benefit and bereavement systems, which is one reason why we want bereaved husbands and their children to be treated on the same basis as widows, through a weekly non-means-tested benefit. That will help low-paid people more than it will help others, because we believe that the current system does not provide enough help with immediate costs, unpaid bills or funeral expenses. We are doubling the lump sum payable on death to £2,000.
We are also providing transitional help to those without children in the period immediately following bereavement. The Bill provides for non-means-tested help for widows and widowers without children for six months following bereavement and for older widows over 55 without dependent children, without income and without the prospect of work. We want to ensure that they are no worse off from these changes by providing extra help through income support.
Finally in that regard, we are also ensuring that the system does more to help the poorest widows and widowers and their children who, until now, have lost their benefit pound for pound. They will be able to get additional help worth an extra £10 a week. In respect of disability benefits and widow's benefit, our objective is to focus help where it is needed most.
These reforms look to the long term and to the needs that we know that we will face in the future; because we are looking to the long term, we are reforming the pensions system. In December, I published proposals for far-reaching reform of the pensions system, and the Bill is the first stage of our reforms. A large part of the Bill—clauses 15 to 43—delivers on our commitment to enable pension sharing on divorce. For the first time, pension rights can be shared like other assets at the time of divorce, which will provide greater flexibility and choice for divorcing couples and for the courts.

Mr. Hilton Dawson: That change is extremely welcome, but I understand that the Government intend that provision to apply only to people who have not commenced divorce proceedings when the Bill becomes law. Surely it would be more logical, and no more retrospective, to allow the provision to apply to people who have not reached the decree absolute stage. Such people would still be married, after all.

Mr. Darling: The Bill will affect only cases initiated after it comes into force. Any degree of retrospection causes immense difficulties. [HON. MEMBERS: "The CSA."] My hon. Friends mutter about the Child Support Agency; it provides an example of what happens when one revisits matters that were otherwise settled. I cannot help my hon. Friend on that issue; the provision will not be retrospective.

Miss Anne McIntosh: Has the right hon. Gentleman considered the position of professional couples with no dependants, especially those couples where the lady might be the major breadwinner? The measure might cause problems on divorce that otherwise would not have arisen. Has he considered the implications of that?

Mr. Darling: It will be up to the courts to decide how the assets are divided, if the divorcing couple cannot decide, and the measure provides an option that is not otherwise available. It is more common to find that the man works and has a substantial pension, which he gets to keep. That is unfair to the woman, who may have contributed, if not in cash then by helping the man to build up his pension rights. The measure will give additional options, but it will be up to the court to decide what is equitable.
Clauses 1 to 7 also provide a framework for the new stakeholder pension schemes, which are central to our objective of ensuring that those who can save for their pension do so. I believe that everyone who can save has a responsibility to do so, but not everyone has that opportunity. For the third of employees who do not have the option of joining an occupational scheme at the

moment, a personal pension scheme is the only option, but such schemes are not suitable for many people, especially low earners or contract workers.

Mr. Steve Webb: rose—

Mr. Jeremy Corbyn: rose—

Mr. John Greenway: rose—

Mr. Darling: I will start—

Mr. Corbyn: There is one behind you.

Mr. Darling: I will start with the Liberals and then look behind me.

Mr. Webb: Would the Secretary of State feel that his reforms had failed if someone on a modest income—say £10,000 a year—who had taken out a stakeholder pension found that he was still dependent on income support a few years after retirement?

Mr. Darling: Our objective is for everybody who works during a normal lifetime to retire with sufficient income above income support. The hon. Gentleman was clearly not referring to someone who had earned £10,000 for a short period—and it is unlikely that such a person would ever have considered a personal private pension, unless badly advised—but the objective is for people who have worked throughout their lives for £10,000 a year to retire with an income above income support, either through the state second pension or through an occupational or a stakeholder pension. The objective under those options is for people to retire with an income above income support, but they will have to take advice on whether or not to go in for a stakeholder pension. I have always been clear on that point.

Mr. Corbyn: The Secretary of State will be aware of the pamphlet produced last year by Barbara Castle and Peter Townsend on the future of the state earnings-related pension scheme. He will also be aware that his Bill, in effect, ends SERPS. Is he not concerned that the Bill is creating a big market for private pensions, when we could be refunding the SERPS scheme to ensure that that good system, which was introduced by the previous Labour Government, is allowed to continue?

Mr. Darling: My hon. Friend has raised an important and interesting point, with which I want to deal. Our proposals replace SERPS with the new state second pension. SERPS is earnings related, so it does not do much for poorer pensioners. When I considered pension reform, I of course looked at SERPS and whether or not we should reinstate it, in whole or in part. A lot has happened over the past 25 years. There are many more people in occupational schemes—they have made their own pension provision—than was the case, or than was even anticipated, in the 1970s, but the group that is losing out particularly badly is the low-paid.
I urge my hon. Friend, if he has not already done so, to look at the Green Paper that we published last December and, in particular, the table about half way through that document showing how we are giving


significant help to people earning £9,000 a year or below. The system now assumes that people are earning £9,000, whether they are or not, and a considerable amount of pension can be accrued with such an income. That will benefit low-paid people in a way that SERPS could not, because it was not designed to do that.
Over the past 25 years, and gradually during the century, more people have made funded provision for themselves. Generally, they will be better off than if they had relied purely on the state. My approach to introducing pension reform was to work within the present system, but to tackle the deficiencies. One of the main deficiencies was that we were not helping people on lower incomes.

Mr. Greenway: I am inclined to agree with the right hon. Gentleman. There are many people who have taken out personal pensions for whom stakeholder pensions, particularly if such pensions are introduced by their employers, will be attractive. Will he reconsider the illogicality of not allowing people to invest in both? Many personal pension policyholders will lose out badly if they are advised to come out of such a scheme and go into a stakeholder pension.

Mr. Darling: The hon. Gentleman has a lot of experience in the industry, and I understand the point that he makes, but there are a lot of people for whom stakeholder pensions might be a better option than personal private pensions. A lot of people who were put into personal private pensions should never have gone into them in the first place.
A number of people have been critical in the pensions press of what might happen to personal private pensions, but most of them neglect to say that they make a handsome living out of selling such pensions. I have always made it clear that personal private pensions are a good option for some people, particularly the better-paid and people who change jobs, but I make no apology for saying that there are people in the middle and lower ranges who ought not to be in such schemes.
Stakeholder pensions are essentially aimed at that market and it is for the Government to ensure that people have options. We must not conduct policy as the previous Government did: the only option for people not in occupational pension schemes was to go into a personal private pension scheme. That was not right, which is why we are legislating for the new stakeholder pension scheme. It will give people without a second funded pension a better opportunity to save.

Dr. Lynne Jones: Will my right hon. Friend give way?

Mr. Darling: I am sorry, but, having spoken for 50 minutes, I must draw my remarks to a conclusion. I gave way to my hon. Friend earlier.
The Bill provides for stakeholder pension schemes to be run in ways that put members' rights and interests first. We shall require all stakeholder pension schemes to meet specified standards. They will be cheaper, with lower charges, and more flexible. For example, if someone takes a break from work to bring up children, we want to ensure that charges will not eat up all his or her savings. We also want to ensure that the schemes are simpler and more transparent.
The stakeholder provision in the Bill is only part of our pension reforms. We are consulting until the end of March on our new state second pension, to which I referred earlier. We announced earlier this month that we want to build on the stakeholder pension scheme proposals by making the rules on pension investments more flexible.
Our objective, through structural reform of the pensions system and other measures, is to ensure that more people take out a funded second pension. That will ensure that people get a better pension, a better retirement, and a better future. The Bill plans for the long term. It is designed to deliver a welfare state equipped to meet the needs of the next 50 years.
The Tory amendment, which Madam Speaker was kind enough to select, is a complete dog's breakfast. It is bereft of ideas and complacent, and it ignores the mounting problems that the previous Government neglected for 18 years. It is therefore also extremely costly. We have already cut the bills of social and economic failure by tackling the causes of poverty and social exclusion. We are making work pay with the working families tax credit and the first ever national minimum wage.
The Liberal Democrat amendment has been written in two halves—perhaps by two of the contenders in the leadership campaign. The first half is extremely sensible and welcomes what the Government are doing; the second was clearly written by somebody who takes a different tack in trying to garner support. A second pence on income tax will be needed to pay for some of the proposals.
Our objective is to provide security for today's poorest pensioners through the new minimum income guarantee. We shall spend £1 billion more on disability benefits this Parliament; we are helping 6.5 million families with the biggest ever rise in child benefit; and we are building an affordable, manageable and effective welfare state, based on our principle of providing work for those who can, and security for those who cannot.
These proposals are radical, essential, workable and right. I commend the Bill to the House.

Mr. lain Duncan Smith: I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof:
this House declines to give the Bill a Second Reading because the complex and unrelated nature of some of the issues covered, which themselves should be subject to separate legislation, will have the effect of complicating pension provision, increasing the disincentive to save, fostering dependency particularly for the self-employed, widows and disabled people, and although, through the work-focused gateway, the Government seeks to make benefit conditional, the necessary conditions for success are missing since the Bill does nothing to increase job creation; and regrets the missed opportunity for lasting reform of social security and pensions.
Today's long-awaited welfare Bill should be measured against the Government's own targets. The Secretary of State is fond of quoting the Prime Minister selectively, but let us complete the quotations. On 7 May 1997, the Prime Minister clearly said:
I have asked Ministers at the Department of Social Security to look in detail at how we can make far reaching reforms that tackle insecurity and property as well as reducing the social security bills".
It is important to get that quotation right, because that is how we judge the Government. According to their figures, and taking account of the working families tax credit, social security spending will increase by some £37 billion.
Many hon. Members may be forgiven for thinking that this is a case of déjà vu, because the Government have already launched most of the proposals. They have a habit of launching, relaunching, re-relaunching and re-re-relaunching items to different sections of the media.
First, however, I want to discuss how the Bill is presented. In a sense, the Government are abusing Parliament. Given that the Bill contains 75 clauses, 10 schedules and runs to 109 pages, it could have been divided into two separate pieces of legislation—some might argue even three or four. The Secretary of State knows that. For example, the provision on pension splitting on divorce is complex and clearly should have formed a separate Bill. Both sides of the House are in favour of the measure, but serious issues need to be discussed, which should be done separately.
The other pensions sector, the stakeholder pension schemes, could also have been subject to separate legislation. After all, the Government have not yet finished their consultation process, and here we are legislating in detail. Just by looking through the Bill we can see the vast raft of Henry VIII clauses. The Bill has been put together quickly in the absence of consideration of genuine comment from many people outside.
Why cannot the Government wait until the consultation process is over, at least before launching the stakeholder legislation? They could easily have presented a separate Bill. Perhaps the Government think that the consultation process is not important, but it was they who said that it was in the first place. Furthermore, representative groups say that much of what they have said has been ignored and they are concerned about the nature of the consultation process.
The Bill has been rammed together with clauses that should not all be in the same legislation. As a result, it will not get the scrutiny that it should receive, nor will the Government be able to take account of some of the major concerns. As I said earlier, the provision on pension splitting should have formed a separate Bill. We agreed that it required close scrutiny and said that there was no ideological difference between us on the concept of the legislation or the idea that it would impart fairness to those who feel that the current system treats them unfairly.
There are some complex issues that require a lot of consideration. Pension splitting will be successful only so long as the benefits outweigh the difficulties. Clearly, it was not embarked on previously because of its complexity. We intend to approach this provision constructively, and I hope that the Government will do likewise. I hope that, if they find that there are major problems, they will acknowledge them during our scrutiny of the Bill.

Ms Gisela Stuart: Will the hon. Gentleman acknowledge that pension splitting on divorce was subject to pre-legislative scrutiny by a Select Committee, which took extensive evidence? I should have thought that he would be satisfied with that.

Mr. Duncan Smith: I do not know whether the hon. Lady has been in the House long enough to know that nobody should be satisfied simply because somebody else has scrutinised something. The Bill must go through a

Standing Committee. I do not know whether the hon. Lady will be on that Standing Committee, but, if she is and intends to keep silent throughout, she will do her constituents no service whatever. As she knows, the Select Committee on Social Security has made a number of recommendations, some of which have not been accepted by the Government. Perhaps she will advance those arguments to the Government.
The Secretary of State said that one of the main parts of the Bill was the gateway. A number of different clauses fall under that heading, so I shall deal with those in turn. The first is the provision for benefits for widows and widowers. The line that runs through much of the Bill—I have raised it before and the Secretary of State knows that I will raise it again—is the continued erosion of the contributory principle and the increasing dependency on the means test, which have become part of the Government's overall thrust. As I have always said, that will lead to an attack on the incentive to work and particularly to save. For example, clause 45 says that the new bereavement benefit will be cut off for those without dependent children after 26 weeks, whereas the current entitlement to widow's benefit is up to retirement age.
Yet again, the Government have ignored many widows' concerns. Under existing calculations, some 250,000 women who are likely to receive the benefit will subsequently lose under the scheme. The National Institution of Widows said that it
would like to see the state contributory principle upheld for future widows
and that it would oppose pushing those widows on to means-tested benefit. Cruse Bereavement Care said:
These benefit proposals would as with all means tested benefits act as a disincentive to saving and encourage people to spend any life assurance benefit or savings they may have made.
Most intriguingly, those changes force those who would normally be entitled to widow's benefit on to income-based dependency.
I received a letter—completely out of the blue—from somebody who lives abroad but has made national insurance contributions for the whole of his working life. It is relevant to read part of the letter. He says:
I am 65 years of age and a state pensioner; my wife is 50 years of age. I have made contributions for some 44 years to ensure a state pension and a widows pension. Some 20 years' contributions were on a 'voluntary basis' as I worked abroad … I paid voluntary contributions to ensure state and widows pension in preference to a private pension scheme, now I learn that the Government is going to renege on their pensions 'contract' with my wife and I.
He says that he feels that he and his wife are abused.
Whether the Government like it or not, that individual highlights yet another example of the strong psychological connection that the public make with the contributory principle. The right hon. Member for Birkenhead (Mr. Field) has made that point time and again. In that individual's case which I have just cited, there is also a legitimate connection, because he paid voluntary contributions. [Interruption.] I love the way in which Labour Members argue that the Conservative Government changed the system. I thought that the Government have said that we got everything wrong when we were in government, instead of which they now say that they want to continue aspects of our policy. It is quite remarkable. I do not know why Labour Members wanted a change of Government: perhaps, rather like the Liberal Democrats, they should have preferred to be on a Cabinet Committee and get on with it.
The Government maintain that there will be serious savings, but that there will be short-term costs of about £140 million. They say that the costs will be offset by the savings. They are wrong, because I do not believe that that will happen. If, through the disincentives, more people are forced on to means-tested benefits, the cost of such benefits will spiral, which will more than obliterate any savings that the Government think they will make. They make the most absurd calculations of the number of people who may end up on means-tested benefit.
A similar theme emerges when we consider the changes for those eligible for incapacity benefit. Those changes will discourage people from saving. For the first time, people with disabilities on incapacity benefit will be means-tested. The Disability Benefits Consortium said:
Making disabled people rely on means-tested benefits is not the way to promote a sense of independence, nor of preventing poverty.
Clause 51 will encourage people to leave work earlier than they would have done. If they work part-time, they are likely to fall below the national insurance contributions threshold, so they will not qualify for incapacity benefit. That is a worry for them. The Royal Association for Disability and Rehabilitation is particularly concerned that people whose health is deteriorating—particularly in the latter years of their working lives—will be driven to take such action, and to take the view that it is not worth their continuing for the two-year requirement.
The terms of clause 52 are also perverse, and they are not first about means-testing. Due to the introduction of the taper, those who have saved for private health provision and have made an effort so that they are not completely reliant on the health service will be driven back to the NHS, thereby increasing the burden on the health service. I thought that the Government wanted people to save, but that is a disincentive to save.
Age Concern said:
There is a danger that by reducing incapacity benefit for those people with a certain level of private pension, and focusing state help only on the poorest through means tested benefits, people will actually be deterred from saving.

Dr. George Turner: The hon. Gentleman attacks the Government's proposals on means-testing. Is he committing his party to removing that arrangement if it ever gets the opportunity? If he is attacking means-testing, how is that consistent with his other attack on Labour for being profligate in government?

Mr. Duncan Smith: The Secretary of State said that it is a question of balance. I think that the Government have got the balance wrong. In answer to the hon. Gentleman—[Interruption.] Unlike the Secretary of State, I shall attempt to answer questions. The hon. Gentleman asked what we would do in government. If he is making up his mind about whether to vote Conservative or Labour at the next election, he will have to wait to find out. We will tell him clearly what we will do, and he can make his own decision. Most of these provisions will get through, but I believe that they will have a detrimental effect, so we shall have to make what changes are necessary to ensure that people do not suffer more than they have to.
Let us consider the gateway interviews, and the requirement for certain categories of benefit recipients to be available for interview. The Government have

launched this policy six or seven times, and it was the only element of the Bill used in the attack on the "something for nothing" culture in the Daily Mail. I was intrigued that the Secretary of State showed no trace of irony while he announced that he was planning to extend the concept of the jobseeker's allowance, which Labour Members so heavily attacked when in opposition. His hon. Friend the Under?Secretary of State, the hon. Member for Wallasey (Angela Eagle), said during the debates in 1995:
There is an authoritarian behavioural requirement of jobseekers".—[Official Report, 10 January 1995; Vol. 252, c. 109.]
The hon. Lady chirrups, but does she think that she is an authoritarian figure now, because that is the logic of extending the concept?
The Government Front-Bench team, who sit there now, trooped through the Lobby and voted against the jobseeker's allowance, which they now laud as the key to their changes. That is absurd. However, my colleagues and I are always prepared to welcome what appears to be a sinner who repenteth. Like many people who first saw the proposals in the Green Paper, we wondered how tough the Government were and whether they would see this through properly.
The Bill confirms that the Government think that it is good to talk, but where is the action? Of course, those who receive benefit have obligations, and if they are able to work, they should seek work. The Government should take the necessary measures to assist them. However, the Government have other obligations that they do not seem keen to ante up to. Most importantly, they must ensure that the cost of employing people falls rather than rises, and that costs on business are kept low, otherwise the necessary jobs will not be created and bringing people in for interview will achieve nothing but frustration and extra costs.
This is a Government whose right hand does not know what the left hand is doing. The Treasury and the Department of Trade and Industry are busy imposing extra burdens on industry. In a previous speech, I estimated that they have risen by approximately £40 billion since the Government came into office. On top of that, the Department of Social Security, through devices such as the working families tax credit, will increase spending on social security by some £37 billion over the next three years. Like everything else, that will bear directly on individuals through their tax burden, and ultimately make employing them even more expensive.
The Government also started the new deal for lone parents, which will cost £200 million over this Parliament. Frankly, it has failed. Approximately 6 per cent. of lone parents take work, and a very high proportion of them fall out of work within six months. I notice that the Government now refuse to publish the figures for the number of lone parents falling out of work because they are so bad. The Government should cancel the programme, but they continue with it.
While continuing with that programme, they talk about obligating lone parents to come in for an interview. Surely they should accept the fact that the original programme has failed. They should save the extra money that they were to spend on that programme, and put it into the gateway—the great idea lauded by the Secretary of State. The Government's stated policy is to do one thing, but they intend to do another. It is absurd.
The Government seem unsure about what they intend to achieve. At no point have we had any targets for savings to be made through welfare to work or the gateway. Bearing in mind the fact that there are about 1 million lone parents on income support, how many new jobs does the Secretary of State think will be created? I shall give way to the Secretary of State if he wants to intervene on that point, but it appears that he does not.
The Government have yet to say how they will spend the money required to interview all those who are eligible. The gateway may become a bottleneck. We see the spending, but we do not see the saving. The Secretary of State has an opportunity to clarify the situation. There will be up-front costs to interview all those people to whom he referred—he said that will happen within three to four days, which is quite a commitment—so he must spend the money required to ensure that they can all be interviewed in that time. The cost will be considerable.
On the basis of what we have learnt from the lone-parent interviews under the new deal, the costs just for lone parents could rise to £100 million. I assume that the Government will ante up to that. I saw the Secretary of State nodding, so I assume that that is the case. [Interruption.] He is now shaking his head, because he realises what the cost will be, but he was nodding when I referred to his commitment.
In the Bill, the Government start to wobble. The gateway is interesting, because the Government use fairly tough language, which worries a number of Labour Members. Clause 47(6) is interesting, however, because it leaves local authorities and even individuals providing services with wide discretionary powers to decide whether a person need not attend the interview.
I am aware of the guidelines that have been published. Paragraphs (a), (b) and (c) give guidance—rather simple guidance—on who should and should not be involved. Paragraph (a), to which the Secretary of State referred, allows someone to disapply the requirement. The example involving the exemption of pensioners was so specific that we have been led to believe that there is some other reason why the Government did not include it in the Bill. Why does the Secretary of State not spend a bit more time working that out? Why does he not specify exactly who should be exempted? If he does not, pensioners will begin to worry about whether they are included—a question that the Secretary of State has left to the discretion of local authorities and individual agencies.
Paragraph (b) allows for the waiving of the regulations for the terminally ill and those who have already attended interviews. That is fraught with complications; but, in my view, paragraph (c) creates the biggest problem of all, because it gives the widest scope for the deferring of an interview. All Labour Members would do well to read it. The example given is likely to affect many people, both those who are genuinely sick and those who may seek to use it as an excuse.
Many people with disabilities are taking serious medication, and would, it seems, qualify almost perpetually. Such people will be left wondering, because the Bill does not make it clear whether they will be called for an interview or the requirement will be waived. The situation will be patchy: the law will be applied differently in different areas, because there will be different views

about which group should be called in. There really is a problem for the Secretary of State. The vagueness of the drafting will lead to further difficulties, and the Secretary of State has left himself open to the requirement for sweeping legislation later. The genuinely ill will worry, and others who learn about the system may say, "Well, there is a way around this." They may observe the way in which others are treated, decide to behave accordingly and make their excuses.
There is, however, another problem. Officials will be under pressure, and will not have the appropriate resources. The Secretary of State has not committed himself to spending the necessary money: he said that he was not prepared to spend it if it was as much as I suggested. Let us therefore assume—for it is just about possible: Governments have found themselves in difficulties before—that, in the absence of the appropriate resources, officials will be under pressure. Staffing numbers alone will be a problem, but the officials will be under further pressure because, according to the Secretary of State, people will have to be interviewed within three to four days.
Officials will be under pressure to ensure that people are interviewed, and they will have to deal with a backlog. Of course they will be tempted to look at the categories in the guidelines and say, "I can get rid of a few of these people." That is a huge hole in the legislation; the Secretary of State knows that, and I wonder why he has left it there.
Moreover, given that the Secretary of State has specified three to four days for those categories—the sick, the disabled and pensioners—he expects those who must make the decision to do so in that time. That will lead to yet more complications. Officials will be under further pressure, and the fact that the guidelines criss-cross will cause extra difficulties.
The more we look at the proposals, the more we see classic new Labour. It is window dressing for the sake of good headlines; behind it, all is confusion and extra cost with no savings at the end.
The Secretary of State spent some time talking about pensions. The long-awaited reform will create even more problems than it seeks to solve. The Government's attack on pensioners—their abolition of advance corporation tax dividend credit, which meant taxing pensioners £5 billion a year—has created the worst environment for many years. There has been the attack on pensioners, and there have been attacks on savings: there has been a series of stealth taxes.
Under the present Government, someone aged 35 with a starting salary of £10,000, rising to £32,000 over 30 years—that allows for about a 4 per cent. increase per annum—will find that his income on retirement is reduced by between 11 and 15 per cent., as a direct result of the Government's new tax. Instead of retiring on a pension of some £14,700, that person will retire on, at best, a pension of £12,500. Those figures are from the National Association of Pension Funds, and they provide a startling illustration of the Government's failure and the attack that they have made on pensioners and savings. This is a classic example of the way in which the Government have failed pensioners.
What have the Government done in the Bill to put the position right? In fact, they have made the position worse. Occupational pension schemes are already in difficulty as


a result of the Government's changes, and those difficulties will now increase. Clause 1 makes it clear that stakeholder pensions will be alternatives to occupational and personal pension schemes: people will have to choose between them. No one can have an occupational or personal pension, and also be a stakeholder. Clause 3(7) adds to the administrative nightmare: it will force companies to set up two separate arrangements, one for new entrants to stakeholder schemes and the other for existing occupational pensioners. There will be extra costs and extra complications.
Clause 1—along with the abolition of ACT dividend credit, and the change in national insurance rebates for contracted-out money purchase schemes, contracted-out salary-related schemes and personal pensions—will put huge pressure on employers to close their company schemes. Eventually, they will simply offer stakeholder schemes, which could ultimately lead to smaller retirement pensions for many people.
The Government are on record as saying, in their Green Paper,
Occupational pension schemes are the great welfare success story of this country.
The Green Paper—published by the Secretary of State—continues:
They are provided voluntarily by employers and many millions of people benefit from them now and will continue to benefit.
How hollow those words are. As ever, rhetoric and reality are detached, and the public out there who are trying to save will suffer. This is a badge of shame that the Government will wear until the next general election.
No new occupational scheme has been set up since the Government were elected. Instead, schemes are closing.

Ms Stuart: Will the hon. Gentleman give way?

Mr. Duncan Smith: No; I have already given way to the hon. Lady.
Not content with destroying occupational pensions, the Government now seem happy to dip into what is left. Let me refer to a little article in the Daily Mail—a paper that the Government now adore, because they like to be published in it. Indeed, the Secretary of State's right hon. Friend the Prime Minister seems to write for it exclusively. According to the article,
The state has made a £17 million profit after a computer glitch led to pensioners being short-changed.
The £20 million windfall came about after more than £2 billion which should have been paid out in cash rebates to private pension holders was banked instead. The Government plans to set aside only £3 million to compensate the victims, with the rest going to the Treasury.
That is pretty typical: it is what we have come to expect from the Government. The Government have sticky fingers. Not only are they busy crushing occupational pensions, and creating a nightmare for those who must choose with no way of affording the proper advice; as ever, they are content to fiddle extra money for the Treasury that was not theirs to start with.

Ms Stuart: Will the hon. Gentleman give way?

Mr. Duncan Smith: No, I have done so already.
Finally, no mention is made of lifelong individual savings accounts. They are on the loose, cutting across stakeholders and complicating what was meant to be simple. There is no extra promise for advice about stakeholder pensions, enabling people to decide whether to opt for an occupational scheme or to take out a LISA. That will mean more cost, and more confusion.

Ms Stuart: Will the hon. Gentleman give way?

Mr. Duncan Smith: Yes, I will.

Ms Stuart: The hon. Gentleman mentioned the creation of new occupational pension schemes giving defined benefits. I understand that, apart from the restructuring of companies, nothing like that was done during 18 years of Tory government.

Mr. Duncan Smith: That is interesting. The hon. Lady has gone and put her foot in her mouth. She must have been eating too many genetically modified foods. In fact, her party's Government made things so bad for occupational pensions that those schemes are now closing. [Interruption.] The point stands. No new schemes have been opened under the present Government—and new schemes were opened under the last Government. [Interruption.] My point is well made. The hon. Lady is wrong. This Government set about breaking down occupational schemes. The Secretary of State sits there smiling. [Interruption.] The only thing that has been lost is the ability of the hon. Member for Stockport (Ms Coffey) to tell pensioners in her constituency that the Government have done anything to support pensioners. The Government have smashed occupational pension schemes and made a complex nightmare of the stakeholder scheme. Pensioners are the ones who will suffer for it. The hon. Lady should tell her pensioners—who, in the example that I gave, would lose more than £2,000—that they are better off under this Government. The fact of life is that they are not.
The Government have made a huge mess of all of it. The Treasury's LISAs, which will affect all aspects of the stakeholder scheme, were meant to help simplify pensions.

Mr. Howard Flight: Does my hon. Friend know where the hon. Member for Birmingham, Edgbaston (Ms Stuart) possibly could have found the bogus data that she quoted? Towards the end of the previous Government's tenure, I personally established an occupational scheme. I know of many other similar schemes.

Mr. Duncan Smith: My hon. Friend is quite right. The point that I was trying to make was that the hon. Member for Birmingham, Edgbaston (Ms Stuart) was wrong—[Interruption.] I said that she was wrong. I shall accept an apology from her, because she was wrong. She sits there hoping for a job, taking briefs from those on the Treasury Bench, but she should be very careful that she gets it right. I dare say that she will eventually apologise.
The point that I was making—it is most important—is that LISAs have created only more confusion. The Chancellor's original idea for stakeholder pensions was that they should be simple, and therefore cheap and easy


to understand. Instead, we have seen many variations on the stakeholder scheme—the last of which is the LISA, for which the Treasury seems to be responsible.
I ask the Secretary of State why the Bill does not deal with the LISA or any of its requirements? Why is the LISA not relevant to this Bill? We have no idea how the Government will control LISAs. We have an idea of the controls that they will impose on stakeholder pensions, but no idea about LISA controls. The final result of all the confusion and chaos that the Government are causing in the pension industry could be an accusation of mis-selling. The sad part about it is that that mis-selling will have to be dealt with by another Government, after that lot on the Labour Benches have been thrown out of office.

Mr. John Greenway: My hon. Friend has put his finger on the real problem confronting the industry and those who give advice. Even in two years, people who choose a stakeholder pension will have to buy an annuity. If people choose a LISA instead, they will be able each year to take cash from it. Which scheme will be better in the long term? Who will be responsible for giving that advice?

Mr. Duncan Smith: My hon. Friend, who knows something about the subject, has put his finger on the point. The Government are in a state of confusion. The two sides of the Government do not talk to each other, and the situation is a mess. Far from simplifying pension provision, they have made it much more complicated and succeeded in inflicting a final body-blow to occupational pension schemes.
A scheme that Ministers said was a great success story is likely now to be heading into the history books as something that people used to be part of, once upon a time. If we add to that attack the Government's annual £5 billion tax on general pension funds and a rising means test, in the minimum income for pensioners, we realise that Ministers have managed to do the double—providing disincentives from both ends for pensioners, who will be squeezed in the middle.
Ministers said that they would simplify pensions, but have made them more complex. They said that, ultimately, pensions would be cheaper; now, pensions will be more expensive. They said that they would support occupational pension schemes, but are now killing them off.
In this Bill—as with so much else that the Government do, with their huge majority—the Government seem petrified by the prospect of dissent and obsessed with control. We have seen such behaviour from the Home Secretary this week—but the House is used to it, as we see it every week. Ministers put together such legislation and ram it through the House, half-finished and without a variation.
A year ago, I explained the criteria for successful reform: it must first strengthen the family; it must strengthen personal responsibility and break the dependency culture; it must strengthen alternative welfare provision; and it must protect those who are in genuine need. On all four counts, the Bill fails.

Mr. Edward Leigh: If Conservative Members are moving away from means-testing, and if we

are not prepared to accept the huge taxation and public spending increases necessitated by implementation of the ideas of the right hon. Member for Birkenhead (Mr. Field), is there another way—perhaps a third way—of dealing with the matter, by requiring families, and encouraging them in the tax system, to take up more of the strain of looking after dependent children, the elderly and the disabled? Is a third way available to us?

Mr. Duncan Smith: My hon. Friend, too, has put his finger on it. There is only one way of addressing the issue—by involving people and by incentivising, not disincentivising them, to take responsibility for their lives. The Government are doing the exact opposite. Although they talk about incentives, all their actions—from their rhetoric, which sounds big, to their delivery, in the Bill—deliver one disincentive after another to saving or to going back into work. The Bill exemplifies the Government's approach to the issue.
The Bill will damage savings, provide disincentives for those returning to work, create chaos and confusion in the pension market and increase social security costs, without saving money at the other end. It is a bad Bill from a bad Government, and it is our pleasurable duty to oppose it today.

Mr. Deputy Speaker (Mr. Michael J. Martin): I remind the House that Back-Bench speeches will be limited to 10 minutes.

Mr. Tom Levitt: I am a trustee of the Royal National Institute for Deaf People, and shall be talking today about issues affecting the disabled. The post is unremunerated. I do not have to declare it, but wanted to make a clean breast before beginning.
The Bill will have a considerable positive impact on the lives of very many disabled people across the country. We should, however, examine carefully the context in which it will operate. I believe that the Bill will enable us to implement long overdue reform, particularly of the disability benefit system, so that it is better focused, more efficient and in tune with the parallel initiatives that will be taken by other Departments.
Since creation of the benefits system 50 years ago—when the social environment was completely different—so much baggage has been left behind, which we have inherited, that it is essential that we carefully study the current system if we are to ensure fairness for all concerned. The fact is that, 50 years ago, disabled people were primarily those who had been wounded in the war. They were young people who, because of their acquired disability, were looking forward to half a century of economic inactivity. Although they believed that the nation had a duty conscientiously to look after them, they did not have the expectation of rights and emancipation that the disabled now have the right to expect. In the years that followed, although there was fuller and more stable employment, there was not assistance for those in employment, as there is now and will be in future.
As the Secretary of State said, current incapacity benefit figures show that about one quarter of British men aged 60 are not capable of work because of incapacity. However, I do not believe that that figure can be right, especially as it is larger than the corresponding number


of 60-year-old men who were not able to work 50 years ago. I do not believe that the health of the nation has become so much worse in that sense in the past 50 years.
We had an entirely different perception of disabled people 50 years ago. We were happy to put away into asylums people with mental incapacity or a learning disability, and to leave them for year after year. It was a matter of "out of sight, out of mind". Deaf people were locked up in those same institutions, because of a failure to understand what disability is all about. The Sexual Offences Act 1956 refers to people with mental incapacity as "defectives". That shows the attitude to disabled people that existed among our legislators. I hope that, when my right hon. Friend the Home Secretary looks at that Act in his review of sexual offences, the word "defectives" will be removed from the legal vocabulary.
We have to ask what the disability benefits system is for, how it is achieving its aim and whether it can be improved. For example, why has the system denied benefits to children under five, depriving their families of compensation for the extra costs of the children's disability? The Bill addresses that, making funds available to cover three and four-year-olds with disabilities. That non-means-tested benefit will be tax free and worth £1,800 a year to the families of the 8,000 children who will be covered.
Why are 70 per cent. of those in receipt of severe disablement allowance also entitled to income support? That suggests that the SDA is not meeting the needs of those with disabilities and is not providing them with an incentive to get out of the benefit trap.
The incapacity benefit system is governed largely by fear. If someone who has been on incapacity benefit for some time knows that they are getting better, there is a disincentive to admit it. Anyone who is long-term sick and starts to get better knows that there will be an economic penalty and they will get no extra assistance to get into work. If they have given up on work or the system has given up on helping them, they get no help in the first place.
There is thus a real incentive for people to hide their developing abilities as they grow out of chronic sickness. The proposal to bring in a new 12-month linking rule for incapacity benefit will be a great relief for such people, allowing them at least to try the world of work, having previously felt alienated from it.
One of the most exciting aspects of the Bill is that it encompasses the idea of joined-up government. The Government acknowledge that disabled people have a right to quality information about the benefits and services available to them and to assistance and training in seeking work when appropriate. They also have a right to special help, after the onset of disability or age-related impairment, to stay in work when possible. Most of all, underlying the Bill is a commitment to the independence and dignity that disabled people need and should be encouraged to keep.
We have to ask why the Department of Social Security and the Employment Service are each given responsibilities for certain aspects of the system, but are refused a mechanism to work together to achieve their common and complementary aims. We cannot defend one Department not knowing what the other is doing when they are working in complementary fields. We cannot defend one officer passing the buck to another

Department and officers at the sharp end of the benefits services giving confusing or incomplete advice. It is not surprising that the advice is often confusing and incomplete and people end up with the wrong benefits. Someone who knows all about the jobseeker's allowance cannot, under the present system, be reasonably assumed to be an authority on disability benefits. Higher-quality advice must be available to everyone.
Many local authorities have proved that the concept of the one-stop shop works. If it covers advice and benefits, the new deal for disabled people and carer's allowances, dealing with compassion and real concern for the disabled people who need its services, will work.
The system must treat disabled people with dignity. There will be an expectation that disabled people will take part in an interview with an adviser. The location and the information given must be accessible to the disabled person. If necessary, it should take place in the disabled person's home, so that the atmosphere is as relaxed as possible and conducive to a meaningful discussion on all aspects of work, benefits and other assistance that may be available. There should be no suggestion that force or blackmail will be used to get the disabled person into work against their will.
Training for the advisers is a major investment. It is right to pilot the proposals. We must not rush the single gateway, because the quality of training must be right. The circumstances, conditions and premises must be accessible and there should be no workhouse atmosphere—none of the screens that form a barrier between the officer and the claimant.
The experience of the new deal has often been a revelation to Employment Service staff. They have told me that it is what they came to the job for. They are able to give the quality advice that people need, instead of treating them as numbers and just trying to get on with the job. Dealing with interviewees as people is important for the new one-stop gateway.
I was going to raise some of the major issues that have been raised by the disability lobby and some of the problems

Mr. Deputy Speaker: Order.

Mr. David Rendel: The main thrust of the Bill is to remove more than £1 billion of benefit from widows, carers and sick and disabled people. The Liberal Democrats therefore strongly oppose it. It is not what people voted for when they elected Labour to government. It is not even what most Labour Members thought they were standing for in the election. If there are still Labour Members of principle who are prepared to stand up for the ideals for which their party has stood so proudly for so many years, I hope that they will have the courage of their convictions, as 47 of them bravely did when joining us in opposing the lone-parent benefit cuts in the previous Session.
With much reluctance, we shall vote for the Conservative reasoned amendment. It is a feeble amendment, making little reference to the Bill's most obnoxious aspects—the benefit cuts. It is not even clear whether the Conservatives will oppose those cuts in Committee. We hear with an ironic laugh the Tories decrying the increased dependency on means-testing that


the Bill involves. Under the Conservatives, spending on means-tested benefits doubled, as did the number of people dependent on such benefits.
We welcome the chance that the single gateway will provide for many people to discuss employment opportunities. We hope that the gateway will focus on more than just employment and will provide advice on benefit take-up, child care facilities and training opportunities. We want interviews to be focused on the individual, not on the benefit that they are claiming, providing support rather than threatening disentitlement.
However, with that welcome come several warnings, some of which mirror the points made by the hon. Member for High Peak (Mr. Levitt). The Bill lists the benefit claimants who will be subject to the single gateway. There appear to be no exempted categories, although there will be some discretion in deferring interviews if they appear to be neither helpful nor appropriate. For people to have peace of mind, the Government must make it clear who will be required to attend an interview, and when.
If the interview is to be solely work-focused, it is surely unsuitable to demand that everyone attend. Severely disabled people may benefit less from a work-focused approach, and more from a service-delivery approach. The Government must be prepared to adapt the gateway to provide for individuals in their own right. By bringing in categories such as carers in receipt of invalid care allowance, the Government risk placing too heavy an emphasis on paid work. Caring for elderly people, children or the sick and disabled is often in itself a full-time job, and it is high time the Government recognised that.
We are told that interviews can take place in the home when it is not feasible or appropriate for claimants to visit an office. It is essential that that measure is interpreted generously. Jobcentres are frequently inaccessible to clients; indeed, something like one third of job centres do not have a disabled toilet. Disabled people—as well as those who live in rural areas—will benefit from the possibility of a home visit.
As for those who must attend interviews in the office, will they receive some reimbursement for the costs of attending—as that, too, would only be fair? When people do not attend an interview, there must be some investigation of why they do not before the benefit is disallowed. For example, someone might have gone into a state of deep depression just before they were called for their interview, and that sort of reason must be taken into account.
Given the climate of fear created by the benefit cuts—and following the disastrous benefit integrity project—claimants are likely to see the interview as nothing more than an attempt to refuse them benefits. The Government must strike a balance between policing claimants and supporting claimants. Both are equally important.
If the Government take only one lesson from the benefit integrity project, it must be that training of staff is essential. In my constituency, a lone parent informed the Benefits Agency that she was going back to work. She handed in her benefit books, and was told to apply for family credit. No one told her to apply for the lone-parent benefit premium. Her housing benefit was altered,

and paid on the assumption that she was getting the lone-parent premium. When the housing benefit department explained the shortfall to her, it was too late for her to apply for lone-parent benefit. Such cases speak for themselves—adequate training is a must.
The gateway provides an opportunity to simplify the system, but unless the Government make clear how the gateway interviews will interact with child support interviews, new deal interviews and the host of other assessment procedures that claimants have to undergo, they are threatening to create more complexity, not less. If the gateway is to be seen as opening an opportunity, rather than closing one, it must remain open after the client has got a job. The Government must recognise that job retention is at least as important as obtaining a job in the first place.
If the Government want to end the something-for-nothing culture, as they claim, and if they want a true contract of rights and responsibilities between the claimant and the state, the gateway offers a valuable opportunity to strengthen the contract on both sides. Sadly, it seems likely, at present, that the gateway will be seen by claimants as an attempt by the authorities to strengthen their hand against that of the claimant.
The Government want an end to the something-for-nothing culture—so whom do they target? They target the recently bereaved. They target those who become incapacitated after the age of 20—or, as we now hear and welcome, after the age of 25 if they are students. They target, disproportionately, women and carers. They penalise savers.
The Bill removes more than £1 billion in benefits. The Secretary of State claims that he is not taking money from the poorest, and he is right to say that the safety net of means-tested benefits is not being removed. So keen is he on those benefits that his changes will force another 250,000 people on to means-tested benefits. The £1.2 billion has to come from somewhere. The first group to be targeted are widows. It never struck me that widows were guilty of something for nothing—yet the Government seem to believe that they are guilty to the tune of £500 million a year.
The Secretary of State was keen to stress that the money does not come from the poorest claimants, but he is wrong—the poorest are equally affected. He is targeting everyone. Widows and widowers will benefit from the increased lump sum, but that is costing the Government only £70 million a year, and is nothing more than an overdue recognition of rising costs.
Many of the poorest widows will be able to claim means-tested benefits when their bereavement allowance stops after six months. However, unless they have dependent children, all new widows and widowers will lose their state earnings-related pension scheme payments—on the basis of their spouse's contributions—altogether. These payments previously amounted to up to a quarter of widows' pensions.
Many people have contributed to their pensions, believing that their partner would benefit. The Government are treating that prudence with contempt. In one part of the Bill, the Government's pensions proposals duck the issue of compulsion in second-tier pensions. However, here we find the Government producing a disincentive to save voluntarily. What a contradiction.
What of those widows and widowers with small lifetime savings of just £8,000? They will not be eligible for means-tested benefits, and they, too, will lose out. Sadly, they are often among those who, in terms of income, are the least well-off.
The Government expect that, just six months after losing a spouse, men and women will find it easy to be back in work—in many cases, after many years out of the workplace. Have the Government no feeling or care for those people? Does the Secretary of State really believe that a woman who has suffered the trauma of losing her husband through suicide or a car accident can get straight back to work as if nothing had happened? The Government clearly know nothing about the psychology of bereavement if they think that that is how human beings behave.
In case any hon. Member thinks that six months sounds reasonable, let no one forget that a widow who knows that her bereavement allowance will run out after only six months will worry about how she will manage thereafter many months before it does run out. The restriction of the bereavement allowance to just six months is unnecessary and cruel, and an attack on human beings when they are at their most vulnerable.
The Government are right to extend widows' benefit to widowers. However, many will view that move with cynicism—after all, the Government only moved on the issue when confronted with a court case that was almost certain to force them to do what they are now claiming the credit for doing voluntarily. However, it is sheer opportunism to take the necessary reforms to widows' benefits and twist them so as to make some money for the Treasury. Having done so, the Government have done their best to portray the £100 million cost of extending benefits to widowers as the main effect of the changes, while conveniently hiding—and, apparently, forgetting—the £600 million cut in widows' pensions.
While we are on the subject of bereavement, why is the lump sum payment not paid to bereaved pensioners as well? The Government could have used the opportunity of reforming widows' benefits to remove that piece of unfair age discrimination. We believe that there is no need to seek savings in bereavement benefits. No extra money need be spent, but the £500 million net cuts could be used to increase the time limit on the bereavement allowance, to include SERPS payments and to pay the lump sum payment to the bereaved of retirement age.
Who else do the Government choose to target? They target sick and disabled people, and those who care for them. The Government now want to cut £700 million in disability benefits. Once again, those who are eligible for means-tested benefits will remain relatively unaffected, yet those with small lifetime savings will be excluded. The Government are targeting women, carers and those who have followed Government advice and saved for their retirement. I know that my hon. Friend the Member for Winchester (Mr. Oaten) hopes to speak on that point later.
The Bill is a mixed bag, and is full of contradictions. The single gateway aims to encourage work, but cuts to incapacity benefit and severe disablement allowance will prove a disincentive to take work.
The stakeholder pension aims to encourage people to save, but the shift to means-testing will pull people in the other direction. The stakeholder pension and the measures

for pension splitting on divorce would seem to support women and carers, but they will simultaneously be penalised through the cuts in severe disablement allowance. The only coherent thread seems to be cutting benefits and promoting means-testing.
That is not what the electorate hoped for when the morning of 2 May 1997 dawned and they woke up to a new Government. In benefits, Labour cuts have followed Tory cuts and it has been hard to tell the difference; but there is hope: already there are signs that some Labour Members may be prepared to say that enough is enough.
After the lone-parent benefit fiasco, Labour Members who had supported the Government in the Lobby, some of them, I understand, in tears, are said to have sworn that they would never be prepared to act in that way again. Now they have the chance to show that they are prepared to stand up for their principles and to vote for a fairer, more just society in which we can reduce the gap between rich and poor. I hope that they will take that chance.

Mr. Frank Field: This is an important day for the Government and for my right hon. Friend the Secretary of State. No one who has witnessed his performance over the few months for which he has held the post could come to any conclusion other than one of admiration for the way in which he commands his brief, presents his brief to the House and regularly demonstrates the quality of humour, which is rare in politicians; it is even rarer for politicians to be able, as he is, to see the joke about themselves and to join in.
Today, we learned of another quality of my right hon. Friend—one that is a crucial quality for someone in his position—knowing when to give way before one is defeated. I very much welcome the announcement of the crucial change of raising the age limit for severe disablement allowance from 20 to 25. The position was not defensible, and it shows good sense and compassion that my right hon. Friend moved quickly to confront reality.
There is much in the Bill that Labour Members will want to support, so I will be very surprised if the enticement offered by the hon. Member for Newbury (Mr. Rendel) has any effect other than to drive us together. The extension of disability benefits to children under five is welcome, and it is a great compliment to my hon. Friend the Member for Preston (Audrey Wise) who, in every year that I have been in the House, has made the case for that reform. It must be a sweet day for her to see that important concession made. Many parents with disabled children owe her a great debt.
There is much to be welcomed in the single gateway. Not only do our constituents think that we have been lax in not operating the rule continuously since 1948, but many claimants themselves express surprise at how little interest Government officials take in them once they have registered for benefit. Before the general election, we said that we wanted to talk to people as they register for benefit and say, "This is the first day of the rest of your lives; how can we make the rest of your lives as happy and constructive as possible?" For that to work, attitudes will have to change in some local offices and staff will need to be trained in new ways; but I do not believe that there is a great deal to fear.
If this great project, the Bill, is a craft that is about to set sail, it is still in harbour. The crew on this side of the House may be anxious to catch Ministers' ears and tell


them of the parts of the Bill that may cause trouble on the voyage. I regret to say that there are aspects of the Bill that are weakest where one would have thought that a Labour Government would be strongest and areas in which it seems that the Government are setting out to defeat their own objectives.
The hon. Member for Newbury was right to say that he was puzzled by the Prime Minister saying that he wanted to root out the something-for-nothing society. The Bill takes much away from those who contributed in the sure faith that they would be able to draw when benefits were needed; but there is not much in the Bill that takes away from people who have contributed nothing or very little. Some of the crew may want to talk to the captain about matters of much concern before the great ship sets sail.
The Government have two policies on pensions: the proposals in the first part of the Bill, grouped around the idea of the stakeholder; and the ideas, also quite properly being promoted, about trying to guarantee today's pensioners a decent minimum income. The two policies are inconsistent.
As the hon. Member for Northavon (Mr. Webb) has demonstrated on several occasions, pensioners face a poverty trap—if their income is above a certain level, they are disqualified—and a savings chasm is opening up, so it will be impossible for people to save during their working lives sums that will allow them to breach the growing gap. There is that growing gap because, for all the good reasons in the world, the Government have said that they will index the guaranteed minimum against earnings, while most other pension incomes, if we are lucky, will be indexed against prices.
Over time, the gap will grow and an increasing number of people who have done everything that the Government have said and do not want to be part of a something-for-nothing society—and would be appalled to think that they were being so categorised—will be told, as a reward, "Well done, good and faithful servant, but you didn't try hard enough and your pension isn't big enough" or "You didn't manage to amass enough savings." Those people will not be better off, and some of them will be worse off, than other people who laughed at the Government and decided not to behave properly. We are talking not about the very poorest people but about the bedrock of Labour supporters: the people who turned out for us in abundance at the general election. Those are the people who will lose.
There is a similar problem with widows. It is not good enough for the Government to say that those who are currently widows will not be affected. Nobody, not even the Conservative party in government, came up with reforms of that kind. Many of our constituents are budgeting on the basis that, should they die, their wives will be covered by the scheme. They have had no option, because the scheme is compulsory, which I think is quite proper. They have not been able to put contributions into a private scheme to protect their wives. They now know that, if they die, the chances are that their wives will not be covered.
It is impossible to square the provisions on incapacity benefit with the despicable phrase about something for nothing. We are talking about people who, through their working lives, have persevered and struggled to get back

to work, often many times, after suffering disability. They did that in the knowledge that their contribution conditions were safe—they had to make only one year's contribution in the whole of their working lives—but now that is to be changed, and they will have had to make one year's contribution in the past two years.
The message will quickly go out from doctors and others, "Please don't bother to go back to work, where you may fail, because by doing so you will probably—not inevitably—disqualify yourself. Get on to benefit straight away, because that is the only way that you can secure the contribution that you've made." That is the very opposite of what the Government said before the election, during the election, and even in presenting the Bill.
We are beginning to witness the targeting of some of our voters, who were targeted by the Conservatives and Mrs. Thatcher when they were in power. She targeted rewards such as tax concessions and council house sales, and we found that our vote was vulnerable at elections. During the passage of the Bill, I beg my hon. Friends to consider carefully how some of its provisions will strike at the best aspects of working-class decency. Our supporters look to us to protect those decencies, not to destroy them.

Mr. John Greenway: It is a privilege to follow the right hon. Member for Birkenhead (Mr. Field) and I wish to contribute in the same spirit that he did. I recall my experience of 29 years working in the insurance and pensions industry, and I remind the House of my interest, especially the fact that I am the president of the Institute of Insurance Brokers and a member of the Insurance Brokers Registration Council, which is a regulator. We have had our share of work to do on the pensions mis-selling issue, about which we have had other debates.
The industry feels a great sense of déjà vu at the Government's proposals for pension reform. The Government's objectives are similar to those of the 1980s and are also laudable. They include transferring provision for income in retirement from the state to personal pensions for as many people as possible, and to encouraging a greater uptake of pension provision. We all agree that the present arrangements are capable of improvement, but we should also remember that this country has done significantly better than most other countries in the European Union. We have greater provision, but we need to extend it into lower-income groups, because many in those groups have made little, if any, provision for their retirement.
It is also clear that some lessons have been learnt from the problems that have beset the industry following the changes of the 1980s. The Government are right to concentrate their efforts on costs and charges, which were too high for many. Time does not allow an analysis of why that happened. We also have a much better regulated industry than we had in the late 1980s, and we have a more professional industry giving advice. It is to be hoped that the contracting-out arrangements will be better.
Other problems remain, and I do not believe that the Government will achieve a smooth transition to stakeholder provision. There is a real danger of paralysis for the next two years, as people do nothing while waiting for stakeholder pensions to come on stream. Those people


in the under-£18,000-a-year income group will be most affected. In an intervention in the Secretary of State's speech, I commented about the lack of provision for mixed provision, and I wish to stress the importance of providing complete portability through the stakeholder arrangements.
Stakeholder pensions have been given a positive welcome by the industry. I chair the all-party insurance and financial services group and we have had numerous meetings on the Green Paper and the Government's proposals. More meetings are likely, because major concerns remain. The benefit design of a stakeholder pension is much the same as a personal pension. It will be taxed as earned income. Yes, it will be available over a long time, between the ages of 50 and 75, and there will be an entitlement to a quarter lump sum, tax free, but the pension will still be based on an annuity purchase. The industry and many right hon. and hon. Members understand and appreciate the concern that annuity purchase currently represents poor value and is the major cause of many of the losses on personal pensions that have attracted compensation. That will cause a big headache for arrangements in the second phase. There is no compulsion to include life assurance. Nor is there any guarantee that people will be better off, because the annuity payment may not be index linked. That is the other side of the coin of the problem mentioned by the right hon. Member for Birkenhead.
The biggest problem arises from the generous provisions on contributions that the Government propose—100 per cent. of salary or £3,600, whichever is the lower. That is good for those under the figure, and it is a huge improvement on what happens now for personal pensions. However, it is incongruous and illogical that the benefit of that improved contributions limit will not apply to personal pensions. Another problem is that the five-year rule, and even the one-year rule, will be income related. It would have been better to allow everyone a flat rate contribution of £3,600 regardless of income. In an ideal world, that would apply equally to personal pensions, and I urge the Government to think seriously about that suggestion.
The low charges that are envisaged mean that commission is unlikely to be payable, but advice is important and information is not advice. The proposal for maximum charges is less of a problem for large contributions paid by cheque or by direct debit than it is for small contributions paid weekly or monthly. There is strong support in the industry for a requirement for employers to provide access to stakeholder schemes, but individuals should be free to nominate their preferred stakeholder, especially if they move between jobs. Serious practical difficulties could arise for those people whose income fluctuates either side of the threshold, at both ends of the spectrum at the interface between the second state pension and the stakeholder pension at one end, and between the stakeholder pension and personal pensions or other arrangements at the other.
I emphasise again the need for flexibility and mixed provisions. I cannot understand the logic of arguing that people who have personal pensions now but who will fall in the stakeholder income group should have to cancel those contracts to contribute to a stakeholder pension. That is illogical. I understand the Secretary of State's point about costs and charges, but there is a danger that personal pension holders will be penalised twice over.

If his argument is that, in some instances, the personal pensions are poor value, why disallow the benefit improvements to personal pension holders that will be allowed to stakeholders? That, too, is illogical. It is no solution to cancel policies and turn them into stakeholder plans.
Costs are not the sole problem. No one has yet addressed the regulatory complexity that is placed on the industry by the Superannuation Funds Office and the Inland Revenue, which adds to costs. Equally, inflexibility undermines value.
In conclusion, I shall make a final, general point. Major policy changes in the pension sector must be long-term initiatives. Contributors and pensioners will invest and draw their benefit under successive Governments, and it will be in no one's interest to anticipate that there will be another major upheaval in 10 or 15 years. Therefore, it is crucial that, with the Bill, we achieve certainty and stability in pension provision, especially for people in low-income groups.
The Government published the Bill before the consultation ended. I do not quibble with that, but it behoves the Government to listen to the representations of industry. I hope that the Bill is not sent into a Standing Committee with the intention that it will emerge in precisely the same form. It is obvious that there must be some flexibility and some listening: if there is, we can get the Bill right.

Mr. Malcolm Wicks: The Bill is important and complex. It is an omnibus Bill, and deals with a wide range of items on the social policy agenda. However, one common theme is obvious—the attempt of the social security system to deal with substantial changes in our society. Those changes include aging and the implications for pensions, the approach to death and bereavement, and issues to do with disability, employment, patterns of work, and unemployment.
The modern feature with which Parliament is having to get to grips is family insecurity. There is no dodging the need for the state to get involved in personal relationships at their most raw and bloody. Hon. Members know, from our advice surgeries, the difficulties that have arisen with the Child Support Agency, and we shall see similar difficulties arise out of pension sharing on divorce. The personal has become political, and we have to meet that challenge.
As an aside to the problem of pension sharing on divorce, I think that, sooner or later, the House will have to get to grips with the related phenomenon of cohabitation. A view on marriage that is not balanced by a view on cohabitation means that there is a risk that all sorts of incentives and disincentives will be built into the system. The House needs to be aware of that problem.
With the Bill, we are dealing with very detailed questions. I hope that the House can change the culture of Standing Committees, so that the Executive's proposals can be scrutinised seriously. Under the previous Government, I got very fed up because Conservative Members were unable to say anything about the measures that went through the Standing Committees. The House of Commons must adopt a grown-up approach to scrutiny: we shall need it if we are to get this very important measure right.
As well as detailed scrutiny, we need an overall vision of social security. The Government have a good story to tell about the health service and education, but what is the story that we want to tell the public about social security? Where is the vision, and what are the underlying principles? It is more difficult to spread good news about social security than about other matters, because the minutiae often get in the way of the storyline.
I think that we need to ground our approach to social security in a sense of moral philosophy—not as a theoretical proposition, but as something that can translate easily into a popular message. The problem is to balance matters of citizenship, and of rights and responsibilities, in these modern and complex times. The idea is hardly new: it is one of the oldest in democratic political philosophy, but it is a rich seam. Although people often articulate the idea, the connection is seldom made between the rhetoric about rights and responsibilities and the details of social policy.
I believe that we need to make that connection so that we can explain to people about rights and duties, and build a popular consensus about social security reform. Much of the task is easy. Most people accept that, if they are able to do so, they have a duty to find employment. Also, most people accept that there is a duty to maintain children, even when a family splits up due to divorce or separation.
However, people also have rights with regard to children, such as a right to receive child benefit. When it comes to the care of elderly people—I expect that the royal commission report will be available shortly—we have a moral duty to help our elders when they grow frail, but we also have rights to some social policy partnership. The royal commission will tackle that, and the strategy for carers set out by the Government a week or so ago came at the problem from another angle.
In social security matters, the ethic of duties and rights, and the balance to be struck between them, finds its best expression—historically and probably for the next 50 years—in terms of contributions and benefits, and in the importance of the social insurance principle. We undermine the social insurance principle at our peril—[HON. MEMBERS: "Hear, hear."] Those who have undermined it most agree with me. It is a sight for sore eyes to see them reincarnated as opponents of the means test.
We all hope that the single gateway will turn into an Arc de Triomphe for the Government, who are right to make the connection between social security and employment. It is perfectly reasonable to tell people that they have a right to claim a benefit, but that they should go for an interview, and think about the rest of their lives. That principle was set out by my right hon. Friend the Member for Birkenhead (Mr. Field), and there can be no quarrel with it.
Although we must approach the matter of single parents with sensitivity, the Government must think it through carefully. I do not want to sound macho, but it is nonsense in this modern age that single parents can stay on income support until their youngest child is 16. I put it to the House that, if we were thinking afresh today about that rule, we would not specify an age of 16. We would not be as cruel as the people in Wisconsin, who set a limit

of 12 weeks, but we might adopt the European model, which holds that the time for a parent to start thinking about work is when the child begins school.
There may be many exceptions, but the quid pro quo should be that, for people with children under five—below school age—we should be more generous in terms of the benefits that we give to the youngest children. That would mean that the difficult judgment that many parents face about when to work and when to stay at home to care for children is taken by the person who knows best. Mother knows best, not the state. I want there to be more rigour in our thinking about the obligations and rights of lone parents.
I shall end by expressing two cautions about the Bill, much of which I support. The first has to do with vocabulary. We need to be careful about how we present the Bill to a wider public, and we must be especially sensitive when we present it to the weakest and most powerless people in our society.
In the previous Parliament, the former Secretary of State for Wales, the right hon. Member for Wokingham (Mr. Redwood), was on one occasion to be seen speaking to the inhabitants of a council estate. There is something unedifying in watching powerful male Ministers in suits lecture single mothers and children, who are among the poorest and weakest members of our community. We must be aware of the language that is used. As I argued when I spoke about the balance between rights and duties, it is possible to speak about obligations and entitlements in a sensible and moderate language.
This is not weak stuff. Sometimes, there is a need for rigour: the reform of the Child Support Agency, for example, has meant that most fathers now—at long last—pay maintenance. However, we also need a sense of compassion when we deal with many of our fellow citizens. I hope that, as well the rigour that will be needed, the milk of human kindness will run through the Bill.
My second caution is also important, and it has to do with social administration. A key test is our need to be sensitive and professional in the administration of much of the Bill. If we are not careful, we may feel pessimistic about the experience of the Child Support Agency or the benefit integrity project. The best of policies fall down if their administration is not right.
We are dealing with some of the most vulnerable people. We are talking about mothers who have sometimes been victims of domestic violence and who turn up at the social security office emotionally and physically bruised. We are talking of people who have the most severe disabilities, many of whom would dearly love a job and need supportive employment schemes. Many people in emotional pain come to the state for support, and the gateway will rightly institutionalise that. The challenge for the Government lies in turning social policy, much of which I support, into sound social administration.

Mrs. Jacqui Lait: It is always stimulating to follow the hon. Member for Croydon, North (Mr. Wicks), who clearly thinks deeply about social policy and usually comes up with interesting ideas. If I am lucky enough to sit on the Committee, I hope that he will be able to join us, although I suspect that that would do little for his blood pressure because he would not be able to speak as he wished.
The hon. Gentleman said that a theme ran through the Bill. I agree that there is one, but that theme was the one identified by the Secretary of State. Throughout the Bill runs a discouragement of saving and an increase in means-testing. Those two things run hand in hand, and either the Government are prepared to accept their implications or, as has happened time after time, they have failed to think them through.
If people stop saving because they will be better off on benefits, wealth creation will suffer. People will become more dependent on the state, and taxes—direct or by stealth—would have to increase. Given our demographic structure—I need not run through statistics that we all know—those increased taxes would fall on fewer and fewer working people.
We must ensure that people who can save do save for their retirement. The Bill will put them off because people on a lower or medium income will see no reason to save. If the minimum income guarantee, housing benefit and council tax benefit are combined, someone on an average wage—the national average is about £19,000 a year—would have to retire with a pension fund of £100,000 to achieve the same income. Someone on an average wage would need to save roughly £1,400 a year to manage that.
That money represents the family holiday. Should a family forgo the annual holiday? Should they forgo a new car, saved for over several years? Should they save the money so that they can end up with an income precisely the same as the income that they would receive from the state? I cannot see people making that illogical economic decision. They will decide to live on the state, and that will, dare I say it, be even easier when they receive a national insurance rebate under the Bill's proposed system.
As my hon. Friend the Member for Ryedale (Mr. Greenway) said, we must not only consider what people would save in a pension fund, but warn them that, under the current annuity system, they will not get the income that they expect. Annuities are giving rotten returns. The Government are reforming pensions in the Bill, and they should have included annuities in that reform.
If, as is foreseeable, we are about to enter a period of high growth but falling prices, incomes will fall, and annuities for people on pensions will be yet further reduced. Meanwhile, income from investments will be doing very well. We shall produce a generation of people embittered by the fact that they have not been able to maximise their income in retirement because the Government failed to take the opportunity to reform annuity law. We should ensure that people have options so that they may choose how best to ensure an income in retirement. We should ask whether maintaining the rigid rules about annuities is the best way forward for everyone.
The proposals on widow's benefit and incapacity benefits also militate against saving, encouraging people to go on to means-tested benefits. I sponsored a ten-minute rule Bill proposed by the late Judith Chaplin—then the hon. Member for Newbury—which called for equal pensions for widowers, so I have no problem with equality. As the work market develops, I believe that more and more women will build their own entitlements because they will always be in work. We must ask whether a widow's benefit is necessary in the long run.

I accept the Government's argument on that point, but their proposals will militate against saving for retirement among both widows and widowers.
I would like to know how the Bill affects the working families tax credit and widowed parents who return to work. Will they keep their widowed parents allowance as well as WFTC and their income? Or will they lose the allowance? That might create a poverty trap, but it could equally be seen as a waste of the state's money.
The Government have missed another opportunity—the chance to return unfunded Government pension schemes such as those for teachers. The schemes are good for teachers, although they would probably do better in the private sector. However, because they are unfunded, they are paid out of current income. That is not the best way in which to provide for teachers in the long run, and other pension schemes within the Government's ambit should also have been reconsidered. Perhaps we may see some Government amendments along those lines.
The Bill is vague on pension splitting. I hope that our debates in Committee will allow us to change the system of scrutiny from negative resolution of statutory instruments to the affirmative procedure. That would allow important and detailed rules and regulations to be debated in the House.
There is increasing complexity as benefits move towards greater means-testing, and greater administration costs are associated with that. There is also a further weakening of the contributory principle. The Royal National Institute for the Blind has pointed out some of the problems, and the Secretary of State has amended one proposal accordingly.
Let me turn to the personal capability assessment. I want to be sure about how some cases from my constituency will be covered by the proposals. For example, how will mental illness be assessed? A constituent of mine—a paranoid psychotic—is being refused benefit. How will his case be assessed under the new arrangements?
I am glad that disability living allowance is to be extended to three and four-year-olds, but I would take it even further down the age scale because a greater number of disabled children are being born and they require extra help from the very beginning. Paediatric nurses and doctors have been lobbying me for years on that point.
We will be taking up a number of issues in Committee and I look forward to being able to press the Government even further on the matter. My general impression of the Bill is that, despite its one or two good points, fundamentally, it will reduce more people to dependency on the state, rather than on themselves, and increase means-testing, thus discouraging savings.

8 pm

Mr. Jeremy Corbyn: I have some sympathy with the view of a number of hon. Members that the Bill is far too big. It contains at least three major elements, all of which deserve detailed scrutiny. I imagine that those hon. Members who are fortunate enough—if that is the way to describe it—to be appointed to the Standing Committee to deal with the Bill will be looking towards their summer holidays by the middle of May, rather than detailed scrutiny of clause 64. If Parliament is to discuss such major legislation, it is important that it is produced in such a way that each section can


be thoroughly scrutinised—pensions generally, pension splitting on divorce, disability benefits and the many other aspects of the Bill.
I am also concerned at the language used in the introduction of the Bill and the Daily Mail type of reporting that has surrounded it. I come from that tradition in the Labour party that believes in a universal welfare state. It is something that the party was founded to achieve and has campaigned to preserve and extend. The party was founded on a belief that society as a whole has a responsibility to insure all its members against homelessness, poverty and ignorance—all of which were envisaged in the Beveridge report and in the post-war consensus surrounding the welfare state.
Language such as the "something-for-nothing society" has been used. Many of my constituents are poor and up against it—many other hon. Members represent similar people. Often, they are unemployed or have difficulty finding a job that lasts more than six months or pays anything like the proposed minimum wage—never mind above that—and they rely on state benefits to survive. About one third of schoolchildren are relying on income support. We should be a little more careful about the language that we use. We are talking about the life blood of an awful lot of people.
My constituency is paraded weekly in The Daily Telegraph and The Sunday Telegraph as the home of the Islington set and extremely wealthy. In fact, it has the highest rate of long-term unemployment of any English constituency, a normal unemployment rate of well over 15 per cent. and many inhabitants who are very poor indeed. The black unemployment levels are far higher than the white unemployment levels. All those issues need to be tackled.
I welcome the Government's willingness, preparedness and determination to deal with those issues of multiple poverty and deprivation, but, by going away from the very principles on which the Labour party was founded, we do ourselves no good with people who have loyally supported us in election after election and who turned out in such vast numbers in May 1997 to get rid of a Government who had created massive gaps between the richest and poorest and who, despite all their attempts at reinventing themselves, had been seen as the party of the means test and of meanness in our society.
I shall concentrate on pensions. The state pension was a marvellous achievement when it was first introduced by Lloyd George. However, before the Liberals become too excited, I must point out that I have a little booklet at home, which was presented to me by a local pensioners' group, which states:
No thanks to Lloyd George. The story of how the state old age pension was won.
He was forced into it by radical groups who met in Walworth road, where the Labour party used to have its head office—the spirit of many of us is still there.
Obviously, the introduction of the state old-age pension was a huge step forwards, as was the passage of the National Assistance Bill, which is still an important landmark piece of legislation because it envisaged the complete welfare state. That legislation saved many asylum seekers from the poverty into which the Tory Government tried to force them three years ago.
The state pension needed reform and development and the most important reforms were introduced by Barbara Castle when she was Secretary of State for Social Services in the 1970s. She introduced the state earnings-related pension scheme for people who did not have access to occupational pensions and the linking of the state pension with earnings or prices, whichever rose the fastest, in 1975. By 1980, the state pension was approaching a quarter of average earnings. The former Chancellor of the Exchequer, Lord Howe, abolished the link with earnings and linked it only to prices. As a result, it has fallen enormously in value in the past 18 years.

Dr. Lynne Jones: Is my hon. Friend aware that Age Concern reckons that, by 2050, pensioners who get the state retirement pension and the second pension in full and who have had an income of £9,000 a year or less will receive the princely sum of the equivalent of £82 a week, which is no more than the state pension that was created by the previous Labour Government?

Mr. Corbyn: I thank my hon. Friend for that intervention. Before anyone else seeks to intervene, I must say that I will not give way again as I have only four minutes left.
The National Pensioners Convention, at the request of the Labour party, made strong representations concerning future pension policy. It met the party in opposition and has met the Secretary of State and other Ministers since we came to power in May 1997. The convention has argued strongly for the linking of the state pension with earnings as a way to ensure that all pensioners share in the rising living standards of our society.
The Government introduced the pensions Green Paper, which we are not debating today. I am a little disappointed that a major part of the Bill relates to pensions, putting into legislative effect part of what is in the Green Paper. Many members of the NPC and others are concerned that a consultation process that they had thought would continue until the end of March has become part of a legislative process. The chances of changing a major Bill like this in Committee are, as everyone knows, fairly minimal.
The Government envisage a minimum income guarantee for pensioners of £75 a week. When I discussed the matter with the Islington pensioners forum, I was explaining the figure, when some disgruntled voice from the third row asked, "What's so great about £75 a week?" I thoroughly agree. The pensioners thought that that was a reasonable starting point to get the state pension to now, but that we needed more. During the previous Parliament, my right hon. Friend the Member for Birkenhead (Mr. Field), others and I were discussing in the Select Committee on Social Security the future of the secondary pension that was proposed at the time. I hope that my right hon. Friend will not mind my quoting him, but he said that, if the political will was not there to maintain the link with earnings of the existing state pension, who was to say that it would be there to maintain the value of any minimum income guarantee or secondary pension in the future? I do not understand why we cannot take this opportunity to revalue the state pension and continue with SERPS, perhaps altering it in some way to assist the poorest, instead of creating a market in which an even bigger slice of the pensions bill is to be paid by individuals into private pension schemes, which probably cost more to administer than a state scheme.
One figure out of the Green Paper that disturbs me greatly is to be found on page 14. If 100 equals the amount of Government money that is spent at present per pensioner, by 2050, under the proposals, it will be down to 58—in other words, public expenditure on pensions will be nearly halved in the next 50 years. Having been mis-sold pensions and conned in the 1996 legislation by the former Prime Minister and the right hon. Member for Sutton Coldfield (Sir N. Fowler) about the real effects of the mixture of public and private pensions, the public are prepared to support the idea of a much higher universal state pension. I wish that we were taking the opportunity to achieve that.
My hon. Friend the Member for Newport, West (Mr. Flynn) tabled early-day motion 328, which envisages an increase in the state pension, which could be funded with the existing surpluses within the national insurance fund. We should be taking this opportunity to declare ourselves in favour of the principle of a high level of state pension, of efficient and reliable public pension provision, rather than forcing an awful lot of people in middle income and middle age down the rocky road of personal private pensions, which have already been such a bad experience for so many people.

Mr. Archy Kirkwood: I am pleased to be able to take part in this interesting debate. It is a shame that the many hon. Members who want to speak are limited to only 10 minutes, which prevents them from taking interventions, as the hon. Member for Islington, North (Mr. Corbyn) said. Good points have been made by hon. Members on both sides of the House.
The Bill is both immensely important and immensely complicated. I suggest to Ministers that one way of giving hon. Members who have not had the opportunity of being behind the curtain of Government secrecy a means better to understand the problems faced by Ministers would be to extend the process of pre-legislative scrutiny. When the Select Committee on Social Security, which I have the privilege to Chair, scrutinised drafts of parts III and IV of the Bill, I was amazed by the complexity of the interrelated problems that Ministers have to face. It is a source of wonder to me that anything that makes sense emerges from the Department of Social Security, if the experience of my Select Committee is anything to go by. That is a serious point: we should all be more humble about how difficult and complicated cracking the problems can be.
While on the subject of parts III and IV, about which I could speak for my entire 10 minutes without hesitation, deviation or repetition, I want to bring to Ministers' attention my belief that the implementation date of April 2000 is a year too early. To achieve the complex changes, the cultural shifts and the training that are necessary in a way that is successful and does not hurt people or cause casualties, it is necessary to consider seriously the need to take more time before the pension splitting on divorce provisions of the Bill—which should probably have appeared in separate legislation—are brought into force. I hope that the Government and the Standing Committee will give that serious consideration.
I am rather disappointed by the stakeholder pensions provisions. I thought that stakeholder pensions were a good idea, but they are likely to be overcomplicated and

overregulated in their implementation, which will lead to all sorts of problems for existing occupational schemes. In addition, the Bill as it stands does not address the problems faced by the self-employed. I hope that the Standing Committee will have a chance to scrutinise that problem properly.
I should tell the hon. Member for Croydon, North (Mr. Wicks) that his ghost lingers in the Social Security Committee. We are considering the possibility of carrying out an extended inquiry into the future of the contributory principle in the hope that such an investigation will inform future debates. In the past, the hon. Gentleman argued powerfully and cogently that we should take such action. We hope to get our report out before the contributory principle is completely abolished—we shall have to be quick.
Like the hon. Member for Beckenham (Mrs. Lait) and others, I am extremely worried about the annuity problems that have arisen—how much annuities can provide and the inflexibility of annuity provision. I await on tenterhooks the outcome of the Equitable Life case, which relates to the guaranteed annuity option question. Those matters are extremely important, for they will have a dramatic impact on the future provision of pensions. The Standing Committee and the Government will have to give consideration to that problem.
I am excited about the opportunities that can be won through the introduction of gateways and I subscribe to everything that my hon. Friend the Member for Newbury (Mr. Rendel) said. There are difficulties, but gateways are a potentially revolutionary way of providing help, back-up and support to the people we want to serve. The 12 pilot projects must be considered carefully. I believe that it is necessary to bring together, in a revolutionary way, the Department for Education and Employment and the Department of Social Security if those gateways are to be introduced in a way that fully exploits their potential.
I should remind the House that jobs do not always eradicate poverty: many families in this country live in poverty even though some of their members are in work. Furthermore, I do not need to remind hon. Members who represent constituencies with higher unemployment rates than mine that there are not always jobs to be had. The Bill's provisions have to be implemented sensitively.
I have recently seen some interesting statistics relating to the issue of compulsion. According to figures from the Library, benefits sanctions and the element of compulsion in the jobseeker's allowance are brought to bear in only one in 40 cases—that is before appeals are taken into account, so the final figure could be less—because people do not respond in good faith to the rules. If we are talking only about shirkers—the pejorative term that people like to use when referring to such cases—or those who are swinging the lead, we must remember that, at most, they comprise only one in every 40 cases. We could have a whole Bill dealing with gateways, integrating the work of the DFEE and the DSS. The Standing Committee must look carefully at the details of clause 47.
Incapacity benefit is a crucial element of the Bill. The right hon. Member for Birkenhead (Mr. Field) was right to express his concerns, and I share them. I have a letter from Patricia Alexander of Currie, in Midlothian in Scotland; I do not have time to quote from it as extensively as I should have liked. She suffers from


rheumatoid arthritis and she is obviously scared rigid by the possibility of the interviews. She writes:
I can't help wondering at what point the interview stops being friendly … I have a knot in my stomach thinking about this. You"—
she is addressing the Secretary of State, not me—
have turned me into an insecure sponger on society where previously I was making the best of the life I have and convincing myself my life wasn't really so bad.
I shall send the letter to the Secretary of State and hope that he and his officials will look into this lady's case. I suspect that she would not be compelled to attend for interview, given that her physical condition is so bad, but she does not know whether or not that is so, and she is worried about it.
On a technical, but extremely important, point, I come to clause 67, about which the Secretary of State has written to the Chairman of the Public Accounts Committee. The clause introduces a power to incur expenditure on the basis of a simple, straightforward statutory instrument, not a Bill. Since 1932, the House of Commons has placed severe constraints on the deployment of public expenditure, but the Bill gives the Secretary of State the power to anticipate changes two years in advance and set in motion preparatory work, and it enables him to make such proposals through statutory instruments.
I admit that that utilises the same technique as local government special grant reports, whereby the reports have to come before the House for consideration. However, I have to tell Ministers that I reserve my position on that question. I hope that, if the Government go down that route, they will seriously consider publishing drafts of such orders. What does the Select Committee on Procedure think? I suspect that the procedure could become available to any Secretary of State, not just the Secretary of State for Social Security. If so, the Social Security Committee will want to see any special grant-type report dealing with preparatory expenditure.
Preparatory expenditure is justified in terms of paving the way for IT provision to be put in place—I am in favour of IT provision, as is the Minister of State. However, I have to point out that the procedure introduced in the Bill represents a dramatic departure from the way in which Parliament has controlled Government expenditure, and it should not be taken lightly. I hope that, before the Standing Committee reaches clause 67, the Secretary of State will have made clear to the PAC, the Social Security Committee and the Procedure Committee how he intends to deploy those provisions. If he does not deploy them in a constrained and careful way, he will drive a coach and horses through House of Commons control over an important area of public expenditure.

Mrs. Rosemary McKenna: Discussions about welfare reform often generate more heat than light, but tonight's debate has been reasonable and not in that vein. When we support welfare reform, we are sometimes accused of attacking the most vulnerable members of society and those in deepest poverty. Such claims are rich coming from Conservative

Members who forced more people into poverty by putting them on benefit in order to massage the unemployment figures under the previous Government.
It is important to put my remarks in context. When I was a small child, my father became ill and was hospitalised for two years. He spent a further two years recovering at home and then secured a succession of poorly paid jobs. I know what it is like to live in poverty: to live from day to day. At the time, my mother was trying to raise three children and maintain some sort of dignity. I know what it is like to live on benefit. Believe me, our lives began to change only when my father began working again. He might have had poorly paid jobs, but at least he was in the labour market. That is the important principle behind welfare reform that the Government are trying to achieve.
Those whom we are trying to help back to work will at least receive a minimum wage. We did not have that. It is not a great wage but, together with access to lifelong learning and further education, it is a first step towards prosperity. It is wrong to describe any discussion about welfare reform as an attack on the poor. The current system of benefits has not released one person from poverty. It is now clear to everyone that, for those who can work, employment is the only route out of poverty.
Our country is not full of workshy individuals and families: tens of thousands of people are denied access to work and do not receive the adequate financial support that would allow them a decent quality of life and some dignity. Thousands of long-term sick and disabled people who want to return to work are denied the support and assistance that they need in order to take that vital step and seek employment. Under the current system, thousands of people with disabilities who will never be able to work do not receive adequate financial support and cannot enjoy a decent quality of life.
It is quite wrong to portray this Bill as a crackdown or a squeeze on the poorer members of society. In fact, it is quite the reverse: it seeks to ensure that those in real need are supported at a proper level. We must all accept that the present benefit system does not work. The gap between rich and poor is wider now than at any other time this century. One in three children lives in poverty—we should be ashamed of that statistic. In the main, people's health and education achievements continue to reflect the social class from which they come.
Tinkering with the present system will not impact to any degree on the social or economic inequalities in Britain today. That is why we should welcome the Bill and embrace the opportunity in Committee to discuss the real issues and the meat of the legislation. The present system traps people in poverty. It was not designed to do that, which is why the new deal has been welcomed by young people, the long-term unemployed, lone parents and the disabled. The Bill is based on the principle of work for those who can work and security for those who cannot.
I am concerned about the plight of those people who have long-term debilitating illnesses, such as ME. They struggled for years to have ME recognised: first, as an illness and, secondly, for benefit purposes. Anyone who knows ME sufferers will be aware of the appalling effect that the condition has on their lives and on their families. Access to incapacity benefit made the lives of ME sufferers less stressful, which is very important to the recovery process.
Many people, particularly the young, recover from illness. However, in the past they received no assistance in returning to work. They had to find themselves jobs and were removed from the benefit system as soon as they secured employment. Because it was a contributory scheme based on previous earnings, those who bravely tried to return to work but failed when their health deteriorated lost their benefit at a higher level. As a result, people had no incentive to try to return to work and became trapped on benefit. That is extremely distressing for people suffering from illnesses—especially when the removal of stress contributes to recovery. The system that was designed to help is delaying the recovery process.
People with long-term illnesses should derive some comfort from the measures in the Bill. As well as determining entitlement to benefit, the reform of the all-work test will provide information about people's capabilities and may be used to plan a return to work—if people are able to do so. The single gateway interview will ensure that those who claim incapacity benefit receive help in planning a route back to work or receive the benefits to which they are entitled. The creation of a single point of access, involving the Employment Service, Benefits Agency, local authorities and the Child Support Agency, should simplify the whole process and make it much less threatening.
Since the general election, the change of culture in the Employment Service has been remarkable. With the creation of the new deal, clients view staff much more positively—they are seen as providing assistance. Anyone can see that the creation of personal advisers has been a tremendous success. Ordinary people know that they are now receiving the kind of professional help that the better-off could always procure and that they are involved in making decisions about their own lives. The difference is tangible when one walks through the door of my local employment office.
We cannot ask agency employees to change without proper training. Prompted by past problems, the trade unions fought for and achieved the installation of security barriers between staff and their clients. That state of affairs was always unacceptable, but the real antagonism between staff and clients proved that the system was not working. The Government must give an undertaking that all staff will feel comfortable with the new approach and that people will have a different experience. That will involve a real commitment to training and a change in attitude that is crucial to the success of the legislation.
One of the lessons that my parents learned during my father's period of unemployment was that part of the key to future success was access to education—lifelong learning. That is how one gets out of unemployment, and the Government's commitment to that is crucial.
With the changes that the Government have already introduced, the millions of pounds being spent, the multi-agency approach to tackle our most deprived areas, the minimum wage, the working families tax credit, nursery places, help with child care, education and maintenance allowances for 16 to 18-year-olds from poor families and the changes being introduced by the Bill, we shall begin to attack the endemic poverty that exists in far too many areas in Britain. That is when we offer real equality of opportunity to the people whom we are elected to represent.

Mr. Julian Brazier: The hon. Member for Cumbernauld and Kilsyth (Mrs. McKenna) will forgive me for the fact that time prevents me from following up her speech, but she seems to have been the only Back Bencher so far to see any merit in the Bill.
The balance of the debate on both sides of the House has been clear. The measure conjures up a curious picture of a stormy sea and sky, with the good ship SS Britain heading for the rocks. The crew rebel, sack the captain and officers and replace them. The new captain appoints a sturdy helmsman from Birkenhead who sets a new course, then sacks him and replaces him with the deputy purser, who puts the ship back on the original course and piles on more coal.
The central weakness of our benefits system is means-testing, which provides the strongest possible disincentive to save and, in some cases, to work. The worst features of the system were introduced in 1988 and I make no bones about that—I was new to the House then and I have since written a number of papers arguing that. As several hon. Members on both sides of the House have implied, the measure goes further down exactly the same route and it will result in a huge increase in costs and extend dependency, particularly but not exclusively among elderly people.

Mr. Andy King: Rubbish.

Mr. Brazier: The hon. Gentleman says, "Rubbish", but let us consider pensions. In 1988, pension provision in this country was on course and we had by far the highest level of occupational pensions in Europe—an achievement of which to be proud. Year by year, the proportion was rising and indeed, in 1988, already more than half the number half of pensioners had an occupational pension. At the same time, the proportion of pensioners reliant on income support progressively dropped until, in 1988, it was less than 14 per cent.
The changes made in 1988, which in many respects are copied and amplified by the pension provisions in the Bill, introduced a income support supplement for pensioners, paid on a means-tested basis. We also changed the capital rule on housing benefit. The justification given by Ministers then was exactly the same as that given by Ministers today: that we were focusing on need.
What happened? The effect on pensioners was electric. On the one hand, the proportion of people with occupational pensions continued to rise. Had those changes not taken place, one would have expected the proportion of pensioners reliant on means-tested benefit to decline further over the next four or five years from 14 per cent. to 11 or 12 per cent. Far from it. The proportion increased from 14 to 16 per cent.—a rise of one seventh.
Let me state that effect in plain English. Throughout the country, hundreds of thousands of pensioners dumped their savings. Who can blame them? They were warned that they would be punished by reductions in their housing benefit if they did not do so and rewarded by a supplement on income support if they did. That is exactly what the Government are doing with their minimum pension guarantee, which will affect a much larger number of people.
The parallel with the Bill could hardly be closer. My hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) and other Members on both sides of the House have outlined the measures in such detail that I do not want to repeat their remarks. Not only will there be an even greater disincentive for those with modest savings to retain them but, for the first time, those who are likely to qualify for modest pensions will have a strong incentive to stop saving into their pension funds. The reasons for that have been explained carefully and at length by several Members who understand pensions extremely well, including my hon. Friend the Member for Ryedale (Mr. Greenway), who is an expert on the pensions industry.

Mr. Duncan Smith: Particularly pensions for the self-employed.

Mr. Brazier: As my hon. Friend says, my hon. Friend the Member for Ryedale is particularly knowledgeable about the self-employed.
I remember a jibe made by Labour Back Benchers in a number of social security debates. I was proud of many actions taken by the previous Government, but I was not proud of their actions on social security. I listened to the jibe of Labour Members, who asked, "How can the Conservative Government argue that the better-off need incentives to work harder but the poor do not?" I thought that there was a lot of truth in that jibe and, when it was made by those such as the right hon. Member for Birkenhead (Mr. Field), I felt embarrassed. Now, unbelievably, a Labour Government have extended means-testing for working people with 89 per cent. tapers in the working families tax credit going right up the income scale and the measure before us provides pensioners with a huge disincentive to save. Of course, colleagues have also mentioned the impact that it will have on incentives for the disabled, widowers and several other groups.
In opposition, Labour again and again made points about the weaknesses in what we were doing. We often heard the then Leader of the Opposition—now the Prime Minister—say, "Let us move from a handout to a hand up." I was one of those who were writing pamphlets in the background, saying that we needed to try to eliminate the disincentives in the system that the extension of means-testing had brought. I also heard the detailed ideas advanced by people, including the right hon. Member for Birkenhead and many colleagues far more distinguished than me—the late Sir Brandon Rhys Williams prominent among them.
I can hardly believe it. We now have a Labour Front-Bench team putting before the House measures that would extend further up the income scale all the worst features of the changes that we made, while starting to unravel the one really good thing that we did in welfare: the encouragement of the growth of occupational pensions and pensions for the self-employed. We were scoring about five out of 10; the present Government seem determined to score about nought out of 10.
That jibe is not quite fair. A few small provisions round the margins are good. I welcome the introduction of the pension for widowers. A close friend, who was a

contemporary of mine at school, is bringing up a little boy. He has had mental health problems and he is struggling, and it is grossly unfair that he does not get similar treatment to a widow. I welcome the fact that several small measures in the Bill will be helpful.
The truth is, though, that this measure characterises everything that is worst about the new Labour party. It bears no resemblance to the traditional views of Labour, grounded in the Beveridge report, which is the basis for the post-war consensus. Clement Attlee would not recognise it. It bears no resemblance to the modern thinking on occupational pensions that spans so much of the political spectrum. It bears no resemblance to the pledges and aims that were so articulately outlined by Labour Front-Bench Members before the general election. It is nonsense.
I acknowledged that the problems in the process started with the mistakes that we made in 1988, but it is incredible how, month after month, at Social Security Question Time, in social security debates and when measures are brought before the House, whenever an hon. Member says, "But you are introducing more means-testing in the face of all the evidence of the damage that it does," Ministers respond by saying, "But the Conservatives did it first."
Ministers may be surprised to hear this, but actually, we lost the last general election, and I am one of those who believes that our introduction of means-testing and the impact that that had on working-class families was one reason why we did so. The British people did not vote to change the captain and officers because they wanted more coal put on, more steam got up and a faster journey towards the rocks for the benefit system—but that is exactly what the Labour Front-Bench team is delivering.

Mr. Roger Berry: It is tempting to follow the hon. Member for Canterbury (Mr. Brazier). For weeks, I have observed the Tory party reinventing itself as the party that opposes means-testing and supports the contributory principle. That sits ill with all that the previous Government did, but Back Benchers have only 10 minutes each in which to speak in the debate, so I shall not spend more time on that.
I shall say a few words about the provisions in this detailed, complex and important Bill that relate to disabled people. I happen to be secretary of the all-party disablement group. We made a written submission to the Secretary of State at the end of December 1998, and I should like to place on record our gratitude for our meeting with my right hon. Friend a few weeks ago. I am pretty certain that the ink was dry on the Bill when we had that meeting; nevertheless, that was an important opportunity to put across some of the views that have been expressed by the all-party group—views that, I make so bold as to suggest, are widely reflected by other disability organisations.
I warmly welcome a number of provisions in the Bill, such as the extension of the higher rate mobility component of disability living allowance to three and four-year-olds. I also warmly welcome increased benefits for severely disabled young people, and I acknowledge in particular the extension by my right hon. Friend the Secretary of State of benefit improvements for severely disabled young people up to the age of 25. I am sure that that extension is, in part, a response to the consultation exercise.
Other measures that the Government are implementing, but are not directly the concern of the Bill, have also been widely welcomed. In the consultation document, for example, the commitment to a disability income guarantee and the expansion of specialist disability services were highlighted. Those are two examples of measures that do not require primary legislation and are therefore not in the Bill.
The all-party disablement group, and disability organisations generally, warmly welcome a great deal in the Bill, in the consultation paper and in other areas of work that the Government are undertaking. However, there are some serious areas of concern and I want to take up from my right hon. Friend the Member for Birkenhead (Mr. Field) the issue of incapacity benefit.
I urge my colleagues in the Government to show the same understanding for the arguments made by disability organisations in relation to their worries about incapacity benefit that has been shown in relation to their representations about severe disablement allowance. The Bill proposes changes to the entitlement conditions for incapacity benefit. The principle is to be established that only those who have worked recently should be entitled to that benefit. Specifically, certain contribution conditions will have to have been satisfied in respect of the previous two years.
The effect of that is that about 170,000 fewer people—about 10 per cent. of those currently eligible—will be eligible for incapacity benefit. Therefore the question needs to be asked: why should 170,000 people, who are unable to work because they are disabled or because they have a long-term illness, not receive an income maintenance benefit as a result of being unable to work and have to rely, if they qualify, on means-tested income support?
The argument which has been made, and which was alluded to by my right hon. Friend the Secretary of State, is that people have received incapacity benefit who should not have received it. Reference is frequently made to the fact that the previous Administration allegedly encouraged people to claim incapacity benefit rather than unemployment benefit. That was the first argument for this policy.
I want to make two points. First, if the Government have evidence suggesting that people who should not receive incapacity benefit will receive it, the solution is to sort out the gateway. It is quite simple: if the problem is that we fear that what may have happened in the past will happen in the future—that people who are not entitled to incapacity benefit will somehow access it—we should deal with that through the operation of the gateway for that benefit—the all-work test or whatever replaces it. That is the sensible thing to do. I urge the Government seriously to consider the implication of denying tens of thousands of genuine claimants their right to the benefit because it is assumed that some may not be entitled to it. The solution to the problem is perfectly clear.
Whenever it is said that in the past people who should not have accessed incapacity benefit have done so, it should be remembered that that is in the past. This Bill applies to new claimants. With the greatest respect to the Government, it is not good enough simply to look backwards and argue that that is why we should remove people from incapacity benefit, because we are dealing with new claimants.
Clause 51 provides for regulation-making powers to protect people who have not recently paid contributions because of caring responsibilities for which they receive invalid care allowance. However, some people cannot be protected in that way. They may have been looking after young children or combining child care responsibilities with part-time work. Some carers may not have claimed invalid care allowance. Others who have paid contributions for many years may become unemployed and then become disabled. Individuals with an extensive work record who subsequently experience a period of unemployment before becoming disabled will find that their contributions count for nothing.
There has been much reference to the "something-for-nothing problem". It is rather insulting to accuse people who have fallen on hard times of wanting something for nothing when they have paid their taxes and national insurance contributions. The people whom I have in mind have a contribution record of 10, 20 or 30 years. After a period of unemployment, they then become disabled. Their problem is not something for nothing, but rather nothing for something. Although they have made their contributions, they are to be denied benefit. That will produce some absurd outcomes. For example, somebody who has worked for 10 years, is unemployed for two years and then becomes disabled is unable to get incapacity benefit, whereas someone who has been unemployed for 10 years and worked for two years can get the benefit.
I shall try to put this tactfully—I am already in trouble anyway. This problem needs to be thought through and I desperately hope that the good sense that the Government have shown in listening to representations on the severe disability allowance will be extended to the grave concerns expressed about incapacity benefit.
My final point concerns the level of incapacity benefit and the fact that it will depend on people's occupational and personal pensions. When the Tories cut invalidity benefit, that was the reason that they used. Billions of pounds worth of savings will be made arising from the cuts made under the previous Administration, who said that they were making those cuts because people were now more likely to have personal or occupational pensions.
Will the Government please consider not using that argument for a second time? To do so would be unfair in the extreme. I very much hope that the Government will take on board my comments and those of the vast majority of disability organisations—indeed, every disability organisation whose submission I have read—and reconsider their proposals on incapacity benefit.

Mr. Edward Leigh: I am sure that the Bill is well intentioned and that the Government believe that it is the only course of action available to them. However, I firmly believe that it will be counter-productive to everything that they hope to achieve. It will compound rather than solve the problems. It will increase means-testing, not indirectly but directly. One has only to look at the proposals to end widow's benefit based on the contributory principle to realise that.
Sadly, the Bill is riddled with tokenism, such as the single gateway concept, which for many young people will be a gateway into a jobless void. Make-work schemes introduced in the past have simply made bureaucracy, not work. If they have made jobs, they have made them at a price that has not been cost-effective.
The Select Committee conducted a rigorous pre-legislative inquiry into pension sharing. However, I still believe that the proposals have been barely thought out, and I oppose them. If I am fortunate enough to be selected for the Standing Committee, I shall set out my opposition in greater detail.
There is no solution to divorce poverty. Indeed, divorce should be difficult. The only solution to divorce is some sort of judgment of Solomon which pleases no one, but that is the reality of life and divorce. We are in danger of creating a mini-CSA disaster. It is almost a cliché to say that the CSA has been a disaster. It will eventually be wound up, and these issues will be returned to the courts, whence they should never have been taken in the first place.
We are going down an extremely dangerous route. The only solution, in broad terms, is for the parties to a marriage that breaks up to keep for themselves everything they have accumulated up to their marriage, for everything accumulated during the marriage to be split down the middle, and, if children are involved, for the court to make a payment to the mother, who usually looks after them, based on a percentage of the father's salary.
I believe that pension sharing will not work. In my experience, the courts are used to dealing with property that is extant. Given the increasing number of short marriages, pension contributions will not have time to accrue to a significant extent. Pension sharing can work only for couples who have had long marriages and are close to retirement age. The courts will be required to interfere in events that will occur way in the future. I believe that chaos could result, and that many people will be beggared. Crumbs cannot be divided in two. If the pension hopes of divorcing couples have to be divided, the only way that can work is to use the Scottish system, which broadly divides everything accumulated during the marriage in half.
These issues have not been adequately debated by Parliament. This is a classic case of Members on both Front Benches walking blindly into something—as they did with the CSA. Many people will reap the whirlwind in years to come.
This is not the Bill that we should be considering. We should be discussing a Social Security (End of Dependency) Bill. We are as guilty as anyone else, and after all the bitter lessons that we have learnt in the past 10 years—my hon. Friend the Member for Canterbury (Mr. Brazier) outlined them extremely well—we should try to reach a cross-party consensus. That may or may not be possible, but we should wind down the remorseless rise in spending of the past 50 years, which has thoroughly corrupted the working classes of this country, and ensured that people on low incomes are encouraged to work on the side while drawing maximum benefits. We have institutionalised—to quote a phrase current this week—family corruption. We should all be ashamed of that. Now we are putting a vicious new twist into the doleful process that both parties have been engaged in for the past 50 years.
In a manic attempt to get single mothers into work, we are ensuring that they will be paid to look after any children but their own. What could be more cruel, senseless and pointless than that? The most sensible

arrangement in life—it has been around for a long time—is two people committing themselves to marriage for life, with one working and one looking after the children. That has been deliberately eroded by Governments over the past 50 years.
It is a pity that Evelyn Waugh is dead, because we need a scathing "Vile Bodies"—type satire of the new work ethic. We are creating a ghastly 1970s Swedish perversion of the welfare state. Responsibility does not lie only with this Government: these proposals are merely the latest in a long, sad process that has continued for many years.
The time for tinkering is running out; the time for salami slicing is over. The time for palliatives is at an end. The time has come for a radical new step to be taken. We need to examine the Department of Social Security, all its benefits and all its structures, and unpick it from the foundation stones upward. That is a task for the Opposition as they prepare for government. [Interruption.] There is no point in the present Government's being arrogant. Sooner or later they will be the ex-Government, and sooner or later our party must try to prepare for government. We cannot return to the old days of tinkering with the system, or make the mistakes made by the present Government. We cannot indulge in short-term opposition, hoping that when we take over power the problems will somehow be solved. The problems will not be solved just by our taking power; we must have our own radical vision.
One benefit must, broadly, be retained. I refer to the basic state pension. That pension, however, should be based rigidly on the contribution principle, and should be passed to an independent body of the mutual, friendly society type. In other regards, however, radical reform is needed. At present, the Government are tinkering with the system. The introduction of stakeholder pensions, the retention of the basic state pension and the system of second pensions will merely confuse people, and I believe that the stakeholder pension will finally destroy any chance of re-creation of the occupational pension movement. Why should employers contribute, when their employees will be given rebates in return for entering the stakeholder pension system?
I believe that, eventually, poverty relief will have to be handed back to local authorities. That may sound radical, but it has happened in the past. I do not think that we can simply re-create 400 benefit agencies. We must think in terms of local action to deal with poverty.
As I said earlier in an intervention, there is a "third way", although it may not be possible. If we are now rejecting the idea of means-testing—as I believe we are—and if we believe that we cannot take the route advocated by the right hon. Member for Birkenhead (Mr. Field), there must be another way. We must try to build into our system, through tax arrangements, increased pressure on families to maintain children, the elderly and the disabled. That may sound radical and shocking, but it is happening increasingly throughout the world. In many American states, for example, as social security budgets run out of steam, Governments and state legislatures ensure that families are made responsible.
Why do we assume that that is such a ridiculous idea? Why do we hand out child benefits to everyone, irrespective of income? Why do we not make parents responsible? Why do we allow young people to become


a charge on the state? Why do we not make their parents, or close family members, responsible? Is that such an impossible idea? Is it impossible to try to re-create the sense of family responsibility, the work ethic and the concept of enterprise by telling family members, "You will be responsible"?
My time is running out. Let me just say that, if we adopted such an approach, we would re-create the system of family control and good, responsible behaviour for which the country is crying out, and which the Government are not delivering.

Audrey Wise: Let me begin by disposing of the Tory amendment, which will not take long.
The Tories complain that the Bill does nothing to increase job creation; that comes from the party that presided over a mass collapse of jobs. They complain about the missed opportunity for a lasting reform of social security; that comes from the party that, year after year and in Bill after Bill, made the social security system worse and more complicated. They complain about bad drafting; that comes from the party that frequently produced amendment papers that were more voluminous than the Bills to which they referred.
Some Conservative Back Benchers now say that they never agreed with all that. Means-testing is becoming Conservative Members' target. "Targeting" was the word that they often used. They were "targeting need", so everything was good. Now, everything is bad: it is means-testing, with which they never agreed. However, I can tell those of my hon. Friends who were elected at the most recent general election that I do not remember a single dissenting Tory voice—not one—on any social security issue. If Conservative Members were worried and embarrassed about those issues, they hid their feelings very well.
I move to the more pleasant task of welcoming the extension of mobility allowance to three and four-year-olds. I am very interested in and very concerned about children. Therefore I really do welcome the provision. Moreover, in that bit of the Bill, I do not have to say that anything is being taken back; it is an unadulterated good.
When I think about children, I think also about their parents. I think about lone parents, because they have special problems. My right hon. Friend the Member for Birkenhead (Mr. Field) said that he wants people to be interviewed and given an opportunity. I am not at all averse to the phrase that he used—"How can we help you with the rest of your life?" That is great. I do not think that such an offer will require compulsion. It will have to be made at the right time, which is not necessarily immediately after a traumatic event that causes someone to need benefit—in such cases, people need benefit very quickly—but the principle of offering help is fine.
I do not understand the need for compulsion. Particularly, I do not understand the need for compulsion for repeated interviews. If an opportunity is being offered, the word will get round. People will tell others about it, and they will flock to that opportunity. The danger of compulsion is that people think that it will lead to more compulsion. They think that it leads to compulsion to take jobs.
I believe Ministers when they say that that is not in prospect. However, I should just fire a warning shot by reminding the House that, for the duration of the second world war, when there was not only conscription but direction of labour—one not only had to work, but was told where to work—there was no compulsion on mothers with children of school age, which was then up to 14. If we could avoid such compulsion during the second world war, I do not know why we cannot do so at the beginning of the next millennium. Let us be careful. We do not want to put people off what could be a good idea by making them feel that there is a hidden threat.
A few weeks ago, I lobbied the Under-Secretary of State for Social Security, my hon. Friend the Member for City of York (Mr. Bayley), on abolition of severe disablement allowance, and have no doubt that other hon. Members lobbied similarly. I told my hon. Friend that there was absolutely no justification for a cut-off at 20, and that it would be a bit more logical if the age were 25. I am very pleased that at least that amount of sense has been seen, and that the cut-off will not be at 20, which would have been extremely damaging.
I have nevertheless to ask the original question: why abolish the allowance at all? The benefit started life as non-contributory invalidity benefit, which was introduced by the previous Labour Government. There was a need then for a non-contributory invalidity benefit, and there still is. Although I am glad that the effect of abolition of the benefit and its replacement with incapacity benefit will be greatly to increase benefit for the youngest, so that they will be better off—that is great; I am very pleased about it—I do not see the reason for preventing anyone, even those who are over 25, from claiming the benefit if they have need to qualify for it.
Let us not forget that we are talking about severe disablement. The Government apparently think that about 16,000 people—or even fewer, as now only those aged up to 25 will be able to claim—are able to claim severe disablement allowance, and that 70 per cent. of those will qualify for income support. The average loss for the other 30 per cent., whose other income disqualifies them from income support, will be £50 a week. That will apply to fewer people, but what counts is not just the other income of the person in question, but other income in the household. The disabled person might have no income, relying on that of a husband or partner. Taking that £50 a week will be a robbery of dignity as well as of cash. Both are important.
The Government predicted savings of £80 million a year in the long run. That figure will be lower now, so why not go the whole hog and accept that the previous Labour Government were right to take a great leap forward in recognising the need for a non-contributory invalidity benefit? Let us keep it available to all ages. The proposal discriminates particularly against women, because there is an assumption that if they are over 25 they will have had an opportunity to build a contributions record. That may not be the case and it is more likely not to be so for women. It would be untrue for anyone who had worked only part-time and remained under the contributions threshold, which is now about £80 a week. Many people go out to work but do not earn more than the threshold, so they never build a contributions record. I appeal to the Government to rethink the proposals.
Some of my hon. Friends have said that they are worried about changes in incapacity benefit. I echo what my hon. Friend the Member for Kingswood (Mr. Berry) said about the dangers of the proposed changes to the contribution conditions. People may well be unable to build or keep a contribution record. If they go sick, they may be able to work only part-time. Their entitlement will be killed. Some will do it, just as they rest before going for medical examinations, then have to be in bed for the next month. People are generally honest. They try. If their contribution record goes out the window because they are not able to work for long enough or for high enough wages, they suffer. That disincentive to work is against all the Government's stated aims.
Then there is the issue of incapacity benefit being a top-up for early retirement. Age Concern has pointed out that people have to qualify. They cannot just go along and say that they fancy having incapacity benefit. If they qualify, they should have it.
I have talked about non-contributory benefits. Let us remember that the essence of contributory benefits is that they are not means-tested. How can Secretaries of State refer to the means of the individual as an excuse for getting rid of people's entitlement to a non-means-tested benefit?

Mr. Flight: Hear, hear.

Audrey Wise: I can do without "hear, hears" from the Conservatives, thank you very much. The hon. Gentleman is several years too late.

Mr. David Winnick: Take my "hear, hears", then.

Audrey Wise: I shall take my hon. Friend's.
The Government are urging people to make private provision. The Secretary of State will then say, "Well, you are going to be well off. You're going to have £9,000 a year. Why should you get state benefit?" People should get state benefit because they have paid for it.

Mr. Deputy Speaker (Mr. Michael Lord): Order.

Mr. Howard Flight: Before I come to the stakeholder measures in the Bill, I should like to make some brief points on the other territories covered. As others have pointed out, the reneging on the widow's pension arrangements is outrageous. When I spoke to a group of constituents about the issue recently, they were horrified. There has been pension mis-selling in the private sector, but the proposal is downright robbery in the state sector.
I am still not clear what the gateway interviews are all about. Are they about helping people, or are they meant to be a real discipline? My hon. Friend the Member for Buckingham (Mr. Bercow) asked the Secretary of State whether people would not receive social security benefits if they did not turn up, but the Secretary of State declined to answer and ducked the issue. Bluntly, there is no point in issuing threats unless they are for real. If, on the

other hand, the interviews are about genuinely helping people, they need to be approached in a much more helpful fashion.
Clause 55—which has not been mentioned—gives the Government considerable scope for regulation making in relation to attendance allowance. My fear is that the clause is there to enable the Government, in due course, to move to means-testing attendance allowance, along with everything else.
On stakeholder pensions, I am concerned that the opportunity for a real and sensible rationalisation and reform of pensions has been missed. America has a simple approach to pensions—one is either a member of an occupational scheme or a 401K, where employers are incentivised to provide 401K schemes. People understand what is on offer—it is very easy. In the UK, we are adding two further complications: the stakeholder, on top of personal and occupational schemes; and the LISA, which can apparently be used as a method of managing money by any one of additional voluntary contributions, or occupational, personal or stakeholder schemes. However, it is not clear how one will plug in from one to another, or whether the LISA is merely a money-management vehicle or—in terms of retirement—whether one can use a draw-down mechanism for what has been accumulated in the LISA.
The main objective of the stakeholder pension surely must be to address pension fund provision by the self-employed. On the Government's own figures, there are 10 million people with occupational schemes, 10.5 million with personal schemes and 7 million in SERPS. There is a work force of working age of about 35 million, with the maximum potentially in work of 31 million. Beyond the 27.5 million who are already provided for, those who are not, overwhelmingly, are the self-employed—the issue of carers being a separate territory.
I cannot see what will make the self-employed take out stakeholder pensions. For those who are in paid employment, there is no choice. They either accept SERPS2, or they take out a stakeholder scheme, if they are not already in a personal or occupational scheme. For the self-employed, there is no proposal that they should be forced to choose between the SERPS2 replacement or a stakeholder scheme. The Government may be hoping that they will be so attracted by stakeholder schemes that they will take one out automatically. I fear that this will be in vain.
The state guaranteed minimum pension now offers a pension top-up that will be approximately equal to that which the average wage earner will accrue within a stakeholder scheme, assuming capital build-up of about £85,000. The incentive for the self-employed individual to take out a stakeholder scheme is dramatically negative. He would be saving £85,000 for absolutely nothing, and would end up in the same position, free, under the state pension guarantee. Yet that is the one key area where there is cross-party agreement: that we, as a country, want as many people as possible to provide for their pensions privately.
My next objection is the limit of £3,600. What is that all about? Many people using stakeholder schemes will find, in relation to their salaries, that that is inadequate—and yet, apparently, they cannot then do a personal pension on top. They may find themselves accumulating


much less than 10, 12 or even 15 per cent. of income. Why not make the limit on stakeholders £3,600 or 15 per cent. of income? My fear is that the £3,600 is a marker for that sum being the maximum that anyone will be able to put into a pension scheme on a tax-exempt basis. In a couple of years, it will be asked why one pension scheme should allow more tax advantages than another.
I genuinely fear that we will have death by a thousand cuts for occupational schemes. Stakeholder schemes will become irresistible for new businesses, especially for covering middle management. There may still be top hat schemes for the top executives, but there is a danger of pension provision for the people in the middle worsening.
The proposals were supposed to help job mobility, but one cannot continue a stakeholder scheme if one moves to new employment where there is an occupational scheme. That seems contrary to the objectives.
The industry has not been given nearly enough detail to get the products up and running. It is keen to co-operate, but there will be a planning blight and the Bill's objectives will not be met by 2001 unless there is a lot more detail. I believe that, as with 401K schemes, people should be able to choose their stakeholder pension; but if the company provides the stakeholder pension, it chooses the manager and the product.
The question of annuities has been completely ignored. The route down which we are going will vastly increase money-purchase pension schemes. Are the Government content that the annuity market will provide adequately? There are overwhelming arguments for scrapping the compulsion to buy an annuity at 75, and reforming the draw-down rules. In the 226 schemes—personal pension schemes—one has to buy an annuity at the time of retirement.
There are some awkward tax rules in relation to equity-linked annuities, whereby, if there is success and the with-profits results exceed the return limit by 3 per cent. in a year, one could easily die and lose some of the net accumulation, after providing from the annuity profit for bad years as well as good. That puts people off using with-profits annuities.
I do not see how the country will cope with the massive proliferation of pension choices without some form of central register for individuals' pension provisions. People will need to discover what cover they have, and it will be needed to provide advice as economically as possible.
As my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) said, there has been some progress with stakeholders; and I am a great supporter of the LISA as a way of managing money; but the biggest change that the Government have introduced for pensions is the abolition of advance corporation tax recovery, thereby robbing pension funds of £5 billion a year. They have endeavoured to excuse that by saying that it was a process for the rational reform of company taxation.
Many will have seen in the newspapers that Unilever has paid a massive dividend because it could not find any investment that met its investment criteria. It was in any case always old-fashioned nonsense to argue that a tax bias in favour of retention would lead companies to reinvest, giving pension funds the benefit of capital appreciation. The—

Mr. Deputy Speaker: Order. I call Mr. David Lock.

Mr. David Lock: I am grateful for the opportunity to contribute to the debate and I wish to concentrate my brief remarks on the issue of stakeholder pensions. Occupational pension funds are one of the great successes of the past 50 years, and I am pleased to serve as the secretary of the parliamentary all-party occupational pensions group. They are the principal reason why millions of pensioners have a reasonable living in their third age, enjoying retirement and living life to the full in their 60s, 70s and 80s. Anyone who thinks that an active life is over when one finishes work should look no further than the Lords and Commons rugby team, whose scrum-half last weekend was aged 69.
However, for many, an occupational pension was never an option when they were working. Today's poor pensioners are, by and large, those who never joined an occupational scheme or were not in a position to make alternative provision for their retirement. They are the 35 per cent. of employees whose employers did not have a pension scheme, those who moved from job to job, the self-employed and those in a number of other categories. Those pensioners are scraping by on a low income. I am delighted that, with the minimum pensioner income guarantee, free eye tests, winter fuel payments, concessionary travel and other measures, the Government are doing so much to target help on those pensioners who need it most. But state help is no substitute for self-reliance. Being entitled to benefits is not the same as having the confidence of one's own income. Our challenge is to ensure that those who are in work today do not become tomorrow's poor pensioners.
Confidence is essential for the pensions market to work, because we invest today and must have confidence that benefits will accrue in many years' time. The pensions industry in Britain has suffered a massive blow to confidence for those who are outside the occupational pension world, as a result of the crass mismanagement and under-regulation of the industry in the 1980s. The history of pensions this-selling and its 2.5 million victims has been told on numerous occasions, and I shall not repeat it. However, there is an equal, if not larger, problem with personal pensions, to which the previous Government and the industry should have faced up. It is the issue of charges. I can do no better than quote the authors of the Pension Provision Group, who said:
Of the main forms of second-tier pension provision, personal pensions have the highest costs, and their charging structure makes them unsuitable for lower paid people who have a high risk of not being able to keep up the payments in the longer term".
There are massive introductory commissions and start-up charges. One third of people who buy a personal pension abandon contributing in the first three years and 40 per cent. do so within four years. That means that vast sums are being contributed to the financial services market with no benefit returning to the investors.
The Bill paves the way for the creation of a new vehicle that will restore confidence to the pension marketplace for those who do not have the benefit of an occupational scheme but can none the less save for their retirement through, of course, stakeholder pensions. A number of issues arise from the proposals for stakeholder pensions. The first is that of trust. No financial institution will be able to start its own stakeholder pension scheme to generate profits for its shareholders rather than benefits for the scheme members. I trust that regulations will


ensure that the nature of all stakeholder pension schemes will be explained in plain English. Members need a clear annual statement stating exactly how much has been paid; the value of the fund to date; and what that would produce in retirement benefits.
I also look to my hon. Friend the Minister for an assurance that regulations will ensure that charges will be strictly capped, so that there is a fair balance between the costs that fall on the scheme generally and those that fall on the individual policyholder. If an individual contributes for three years or more, he should be able to point to that part of the annual statement that shows the benefit that he or she has accrued. That will be the incentive to carry on contributing.
The second issue is that of confidence. Stakeholder pensions will inspire confidence because they will be run as non-profit-making trusts, rather than designed to benefit external shareholders. The stakeholders can know that the funding to which they are subscribing will be focused on them, designed to give them benefits and not simply used—as many personal pensions have been—as a vehicle for somebody else to cream off the profits.
Who will be the trustees for the new trusts? I am delighted that many organisations have expressed an interest in setting up stakeholder pension funds. Trade unions, chambers of commerce, employers' organisations and many other bodies are in a position to offer stakeholder pensions to the people within their influence. I especially welcome the work of trade unions. Many trade union members have earnings that fall between £9,000 and £20,000. They no longer work predominantly for the public sector or for large employers: many work for smaller employers or move from job to job. Union members look to their union to look after their interests at work. It is logical that they should also look to the union to offer them the opportunity to invest in a pension for when they finish work.
Thirdly, stakeholder pensions will catch people early. When they are up and running, they will encourage employees to become involved in a pension fund when retirement is the last thing on their minds. I appreciate that retirement from work may seem a distant prospect for some hon. Members, such as my hon. Friends the Members for Shipley (Mr. Leslie) and for Watford (Ms Ward). I have just emerged from the halcyon days of youth, and can recall what a distant prospect reaching the age of 60 once seemed. However, the reality is that, if it is left solely to young people to plan and pay for pension provision at the crucial time, they will put off doing it until they "get around to it". There is always a better use for money today than saving for a distant tomorrow.
Yet, the longer money is in a savings scheme, especially a pension fund, the more it grows. It earns interest, and interest on that interest. As many people have found to their cost, they get much less if they start saving late in life.
Clause 3 imposes a duty on employers who do not operate an occupational pension scheme to select which stakeholder pension scheme should apply to their employees. That is a modest duty and employers should not be able to sidestep it. After consultation, they will be obliged to designate one or more schemes to their employees. That will be of great benefit to the 35 per cent. of employees without an occupational pension.
Finally, I strongly support the growth of ethical investment funds, which have been a remarkable and impressive development in recent years. Many people ask about the type of businesses in which their savings are invested, and they are right to do so. I would not want to invest in a tobacco firm, or in a company that improperly exploited people and natural resources in developing countries. Other people feel strongly about companies that carry out animal experiments. However, because pension savings are pooled, investors lose the right to control how their money is used.
Stakeholder pensions will provide substantial opportunities for the Churches, Greenpeace, Friends of the Earth and other organisations to create pensions with clear and transparent ethical investment strategies. The record of the ethical investment trusts to date has been most impressive, and that reflects their professionalism and the high-risk nature of the less ethical activities in which some companies get involved. Those who did not invest in the American tobacco companies are not now paying the price of settling tobacco litigation in United States.
Stakeholder pensions are a significant and welcome investment. They will offer a non-profit-making, safe and convenient investment vehicle to provide secure futures for the millions of people for whom occupational pensions are not available. They will provide the same benefits for tomorrow's pensioners that people with occupational pensions enjoy today. I hope that all hon. Members recognise our collective interest in persuading everyone who can to save for their retirement. The Bill, by making provisions for stakeholder pensions, takes a significant step in that direction.

Mr. Quentin Davies: We have had a thoughtful and well-informed debate, to which many members of the Select Committee on Social Security have contributed. It has been an unusually original debate, and some very original remarks were made.
What has been most notable about the debate is the strange absence of party politics. People listening to the debate, if they were not in the Chamber or watching on television, would have had difficulty in guessing from which side a contribution came. However, they would have had no difficulty in grasping that most speakers have criticised the Government. Very few had a good word to say about the Bill.
Perhaps even more surprising is that Liberal Democrat Members, who are normally so subservient to, and so glamorised by, the Administration, decided to stand up and be counted. That may, perhaps, make the Government's business managers pause, at least for a second or two.
We have heard powerful speeches, including that of my hon. Friend the Member for Canterbury (Mr. Brazier), who spoke bravely and well in acknowledging that not all was as it should have been under the previous Administration. Serious mistakes were made then, but my hon. Friend pointed out the extraordinary irony that a Labour Government who won power by claiming to offer a different deal to the British people have in fact simply aggravated the position that they inherited. The Government have gone much further down the bad road of means-testing, and they have begun to attack the national insurance system in a way that their predecessor would not have dreamed of doing.
We heard penetrating and expert contributions from my hon. Friends the Members for Ryedale (Mr. Greenway) and for Arundel and South Downs (Mr. Flight), each of whom has long-standing professional expertise in the field. The House always listens to my two hon. Friends with great attention, and it did so again tonight. I hope that we shall defeat this extremely bad Bill in half an hour or so, but, if we cannot succeed in doing so, I hope that we shall hear from my hon. Friends again in the Standing Committee.
My hon. Friend the Member for Beckenham (Mrs. Lait) also gave us an effective indictment of the Bill and of the impact of means-testing on saving. She made a slightly different calculation from that which I made in the Chamber a couple of weeks ago, and she came up with the figure of £100,000, below which anyone who could not save that much would be better off not saving at all. To save some lesser sum would only deprive that benighted individual of the thousands of pounds of means-tested benefits to which he or she would otherwise be entitled.
My hon. Friend's £100,000 is somewhat more than the £80,000 that I calculated, but both figures are far too high. It is appalling to think of people on low or modest incomes saving all their lives for nothing at all. It is appalling that their sacrifices should be mocked and made as nothing by the new Labour Government. As each month passes, and the Government go further down the road of means-testing, the figure will rise higher and higher. It will continue to rise throughout this Parliament unless the Government see the error of their ways, and there has been little sign of that.
We heard a particularly thoughtful and frank speech from my hon. Friend the Member for Gainsborough (Mr. Leigh) who did not spare us in the language that he used. He referred to the corruption of family life, and to a deliberate increase of dependency in our culture. Such things need to be said because the House is the one place in which the wiles, deceptions and cover-ups of the Government may be revealed. Only here can we get away from the clever press spin to which we have become so used over the past two years. It is here that we can get behind that spin to see the reality of what is happening.
Perhaps the most shattering indictments of the course on which the Government have embarked have come from their own side of the House. They came from a range of right hon. and hon. Members who carry great respect in the House. As all hon. Members here would bear out, they have had a record since they have been in the House of taking a close interest in social security and welfare. They have fine personal records of compassion and concern for the disadvantaged. I think in particular of the right hon. Member for Birkenhead (Mr. Field) and the hon. Members for Preston (Audrey Wise) and for Croydon, North (Mr. Wicks), but they were joined by other hon. Members, including the hon. Member for Islington, North (Mr. Corbyn), who always speaks sincerely, even if it is—[Interruption.] I was about to say that it is relatively unusual that I find myself agreeing with the hon. Gentleman, but I certainly did so tonight.
After all that, Mr. Deputy Speaker, you might think that we not only had a good debate, which we certainly have had, but that the House has had a good day. In fact, the House has had not a good but a very bad day. We have had a shameful day and I trust that the Government will not try on the House another day like this.
First, the Government came to the House with three distinct Bills wrapped up in one: one on stakeholder pensions, one on pension sharing and one on their disreputable, so-called welfare reform proposals, which are designed to take money from the bereaved and widows, some of the most vulnerable people in our society. Why did they wrap those three distinct Bills in one? I will give way to any right hon. or hon. Member on the Treasury Bench who wants to intervene to offer another explanation of that extraordinary procedure. The Government thought that, by wrapping all those measures together, they could confuse the public debate and bury some of the most unpleasant proposals, which would escape the scrutiny that they so obviously require.
If that were not enough, the Government have compounded the error. Someone—no doubt, Mr. Alastair Campbell, once again—decided to be even cleverer than wrapping up three distinct Bills in one document. He decided—I say "he" advisedly, because those on the Treasury Bench are mere puppets in his hands—that he could bamboozle the British public even more effectively, first, by ensuring that the Bill, which is actually three Bills, was put before the House on the day on which we have a statement on the euro, when two hours would be taken out of the time that we might otherwise have to debate it. Secondly, he calculated that tomorrow's headlines would concentrate on the euro, so some extremely unpleasant realities for millions of people could be hidden from public view.

Mr. Chris Pond: rose

Mr. Davies: I will give way in a moment, but, first, the hon. Gentleman will have to listen to the third reason—in some ways the most disgraceful—why the procedure tonight has been extremely disreputable. It is that the stakeholder pension Bill should not have been debated in the House today either as a separate Bill or wrapped up with a lot of extraneous legislative proposals because the consultation period set out in the Green Paper that the House received in December does not end until 31 March. If the public cannot have confidence that the Government will not formulate final proposals in the form of a Bill until a consultation period has come to an end and they have listened to what those who want to comment on the proposals have to say, they will cease to respond to consultation.
By treating Parliament and the public with such contempt, the Government are ensuring that the whole principle of consultation is devalued. By doing so, Ministers have done a terribly bad day's work, not only for their Department and for the people who depend on the national insurance system, but for the whole cause of good, effective Government—Government who listen to people and who take account of realities before drafting Bills.
The Government have been so carried away by their vast majority, which they think will allow any amount of ill-considered rubbish through the Chamber, that they have decided that they can contemptuously discard the consultation process.

Mr. Pond: I am grateful to the hon. Gentleman for giving way, and apologise for having caught him in mid-flow. Does he recognise that one of the reasons why Labour has such a large majority is that the Conservatives


in government caused such havoc for the poorest and most vulnerable section of our community that people lost all faith in their actions? May I also say to him—he will like this bit, I promise—that I was rather impressed that, like us, he sat through sitting after sitting of the Social Security Committee when it considered pension sharing on divorce so as to find out what it was all about? Does he not recognise that the reason why it is legitimate to put the large section dealing with pension sharing on divorce in the Bill is that there has been important scrutiny in the Select Committee, whose debates will be important in the Standing Committee?

Mr. Davies: The hon. Gentleman is obviously dissatisfied that he failed to catch your eye, Mr. Deputy Speaker, and so was unable to make a speech. What an extraordinarily perverse and idiotic line to take—that, because the previous Government made a few mistakes, it is a good idea for the Labour Government to make a load of colossal new mistakes in the same vein.
There is a great deal wrong with the Bill. On the subject of pension sharing, we heard some interesting suggestions on how to deal with flaws in the Bill from the hon. Member for Croydon, North and my hon. Friend the Member for Gainsborough. On stakeholder pensions, it is clear that a range of essential issues have not been thought through—the burden on employers, the heavy management and administration structure of the trust and, in particular, the utter confusion created by the Treasury having put forward its rival set of proposals for lifelong individual savings accounts. People will now need to take expensive and complex advice if they are to sort out the confusion that the Government have gratuitously created.
As I have said before, perhaps the most fundamental problem with stakeholder pensions is that, although they are supposedly designed for the less well-paid and the lowest-paid members of our society, the Government are rapidly making it clear that the less well-paid should not be investing or saving at all, whether in a pension or by any other means. That is the great tragedy of what the Government are doing to our society and to our future as a nation.
On welfare reform—so-called reform—what the Government are doing is quite unspeakable: it is a brutal attack on the most vulnerable. Suggestions have been made tonight about the line that genuine welfare reform might take—I look again at the hon. Member for Croydon, North. Far from adopting such a course, the Government, under the orders of the Treasury or perhaps of Mr. Campbell, have not been ashamed to go for the softest targets, the people who can least easily defend themselves—widows and those who qualify for incapacity benefit. They cannot get much lower than that.
So complete has the subjugation of the Department of Social Security to the Treasury become that the Ministers now sitting on the Treasury Bench, who only got there after a couple of reshuffles which were needed because their predecessors were not quite as malleable, are not prepared to do anything to stand up for the national insurance system, which ought to be their sacred charge. As we have seen clearly tonight, the disquiet among Opposition Members providing the most graphic testimony, the Government no longer have any principle that cannot be subverted for the sake of a quick political

fix, or under instructions from the Treasury. There is no promise that will not be broken and no person so vulnerable that he or she will be protected from Treasury savings.
The Government have debauched their principles and devalued a great national institution—the national insurance system, which was the achievement of many generations in this century and of all political parties. They have sullied the legacy of their own forebears and betrayed the trust of their own supporters. Most unforgivable of all, they have simply defrauded millions of British working people who have contributed all their lives for the national insurance benefits that they are now to be cynically denied.

The Minister of State, Department of Social Security (Mr. Stephen Timms): This has been a lively and interesting debate. We have enjoyed the rumbustious speech made by the hon. Member for Grantham and Stamford (Mr. Davies); it was somewhat unguided and mistargeted, but no less enjoyable for all that.
I am pleased that so many hon. Members wanted to take part in the debate, recognising as they do the central importance of the task that the Bill takes on. The Government have set out to build a new Britain that will be modern and decent—and a modern and decent Britain needs a modern and decent welfare system. That is what the Bill is for.
There can be no dispute that the system needs reforming. A constituent—a young Asian man in his late 20s—came to see me at my surgery last summer. Four years ago, he was working at one of the big London sorting offices. While off work one day, he was in a car accident and he was left with only partial use of his left arm. He was forced to give up his job, awarded a low rate of disability benefit and has not worked since. He told me that he wanted to work again, but he obviously had no confidence at all that he would be able to do so. He is married with a young child and another on the way, and he has been deeply worried about how he can bring up his family decently on the low income that he now receives.
However, there is no reason why my constituent could not work: he is a bright young man, he is right-handed and his right arm is fine. What he needs—and what he should have been offered four years ago—is some serious help to plan a return to work. Better still, he should have received help so that he did not have to leave work in the first place. That young man has been badly let down by our benefit system, and it is the system that needs to change. Too much of what the system does is out of date, or is done in an out-of-date way. The result is that far too many people are badly off when they do not need to be.
The Bill marks the start of a process of vital reform: building a system that delivers for people and that provides help to people, instead of trapping them, by applying the success that we have seen in the new deal right across our welfare system. When the Bill was published, I heard a radio interviewer on "Good Morning Wales" talking to a lone parent, Bithig Davies, about work-focused interviews for making and renewing benefit claims. She did not denounce them, but said:
It's nice to think that somebody actually cares about single parents who want to go back to work … In my case it didn't happen. Nobody bothered at all.


That is the real indictment of the system that we have inherited: it has not bothered. By building on the new deals already in place, the Bill will at last start to put things right. A modern and decent Britain needs modern and decent welfare that is active, people centred, efficient and robust on fraud and that exploits new technology to the full in delivery. That is the kind of welfare system that we want.
We want to rebuild the system around work and security: work for those who can and security for those who cannot. It must be driven by principle, recognising that, for those who are able to, having a job is the best way for people to realise their full potential.

Dr. Lynne Jones: My hon. Friend has quoted a young woman from a radio interview. I am sure that most people support the gateway and the concept of the individual, tailored approach. However, did the Government's consultation not reveal that the majority of the 1,000 or so respondents felt that job interviews should not be compulsory?

Mr. Timms: Our proposals for single parents have been welcomed extremely widely, and the young woman whom I quoted from that radio interview speaks for the overwhelming majority of lone parents.
I turn to some of the points raised in this excellent debate. I shall comment first on the intervention that the hon. Member for South Antrim (Mr. Forsythe) made at the beginning of the debate about the effect of the Bill in Northern Ireland. The majority of the Bill's clauses—with the exception of those measures set out in clause 74—will not apply automatically in Northern Ireland, which has a separate system. It is anticipated that Northern Ireland will legislate to retain parity with the rest of the United Kingdom, but that will be achieved when the Assembly assumes its functions in March or April this year via a new fast-track procedure.
My hon. Friend the Member for High Peak (Mr. Levitt) rightly drew attention to the scale of the changes that have occurred in the past 50 years since the present welfare system was defined. He was absolutely right to state that disabled people, in particular, are no longer willing to be written off by the system, as has occurred in the past. Disabled people have ambitions, and the Government want those ambitions to be fulfilled.
The hon. Member for Newbury (Mr. Bendel) began an interesting contribution by denouncing the Tory party's amendment and then announced that he intended to lead his hon. Friends into the Lobby to vote for it. I lost the logic of his argument. Many people who voted for the Liberal Democrats at the general election will be surprised to learn this evening that Liberal Democrat Members are voting with the Tories on welfare.
My right hon. Friend the Member for Birkenhead (Mr. Field), in a characteristically thoughtful speech, welcomed the announcement that people who remain in education and become incapacitated before the age of 25—rather than 20, as the Bill states—will be passported on to incapacity benefit. My hon. Friend the Member for Preston (Audrey Wise) particularly welcomed that measure and the change to accessibility to the mobility component of disability living allowance for young children.
I disagree with my right hon. Friend the Member for Birkenhead in his interpretation of the effect of the changes that we are making. The Bill revitalizes

contributory benefits by, for example, extending bereavement benefits to widowers. That is a new contributory benefit for people who have not had access to one in the past. We are proposing new contributory rights through the state second pension, which is a new, 100 per cent. contributory scheme to be introduced by the Government.

Mr. Forsythe: Is the Minister telling the House that the Bill will not be introduced in Northern Ireland, except by the Assembly? If we suppose, for the sake of argument, that there is no agreement and no Assembly, are the Government saying that the legislation will never be introduced in Northern Ireland?

Mr. Timms: I have every confidence that the Assembly will take up its powers within the next couple of months and introduce the necessary legislation, but the Bill's provisions will not automatically take effect in Northern Ireland.
On the future of the contributory principle, I point out that nobody starting from scratch would invent the system that we have today, with all its complexities. We are improving and rationalising contributory benefits for people of working age which account for only 20 per cent. of national insurance benefit spending. We make no apology for concentrating extra help on those who need it most. That is why we are giving young disabled people a new entitlement to incapacity benefit.
We remain firmly committed to a strong contributory basis for retirement benefits, including the basic state pension, which will not be means-tested, as well as the new state second pension. That is not the death of a principle; it is the birth of a strengthened and modernised benefit system.
In response to the points made by my right hon. Friend the Member for Birkenhead, I point out that, since last October, when we greatly extended the linking rules for incapacity benefit from eight to 52 weeks, disabled people have been assured that they can try work for short periods with a guarantee that they will be able to return to the same level of benefit if they should fall ill again. That rule also means that they will be able to meet the new contribution test; so, rather than making it harder for people to try work, we are making it easier, and it is absolutely right that we should do so.
My right hon. Friend the Member for Birkenhead and my hon. Friend the Member for Kingswood (Mr. Berry) made several points about incapacity benefit. Those concerns have also been raised by members of the disability benefits forum and others. The changes that we are making are right. After the war, fewer than one third of people in work had access to a non-state pension. Today, about three quarters do. It is right to reflect that change in the rules for incapacity benefit, as we are doing, and to cut the incentive to retire early that the old system provides.
It is right also to ensure that incapacity benefit is an insurance benefit for people who become incapacitated while working, as was intended. The system should not engender in people who are unemployed for a long time an aspiration to become sick. We want a system that encourages people to aspire to work.
The changes are right, and they give us the opportunity to improve the help that we provide for the people who need it the most. I would say to the hon. Member


for Newbury in particular that it will not do, even given the notoriety of the Liberal Democrat party on this score, to applaud the extra spending in the Bill while deprecating the measures that make those improvements possible.
I had hoped to be able to respond to some of the interesting points that have been made about stakeholder pensions. Rightly, the hon. Member for Ryedale (Mr. Greenway) commented that they have been welcomed by the industry. In a well-informed speech, my hon. Friend the Member for Wyre Forest (Mr. Lock) spoke about the widespread interest in providing stakeholder pensions; I have no doubt that they will be very successful.
In one of the most effective speeches of the evening, my hon. Friend the Member for Cumbernauld and Kilsyth (Mrs. McKenna) spoke about the way in which the Employment Service had been transformed by the new deal; she was absolutely right. The Tory idea of social security was as a giro factory. The claimant went in and spoke to someone sitting behind a glass screen he or she they had never seen before and would never speak to again. If the claimant could persuade the system that he or she was entitled to benefit, it started to send giros; beyond that, it took no further interest in the person. And the cheaper the system was to operate, the better—never mind the consequences.
Our view is completely different. We want a social security system that actively helps people, not one that just sends out giros. We want a system built around not, "How little can we get away with paying you?" but "How could we best help you plan a move to independence?" We want to invest in new technology, not to cut staff but to enable our staff to provide people with the help that they need and have not been able to obtain in the past.
As has been said, the job of the Employment Service used to be to minimise the amount of jobseeker's allowance that it paid out. [Interruption.]

Mr. Deputy Speaker: Order. There is a general buzz of conversation. Hon. Members must listen to the Minister responding to the debate.

Mr. Timms: The staff were encouraged to think of themselves as benefits police, with targets set accordingly. However, with the new deal—I am delighted that my right hon. Friend the Secretary of State for Education and Employment is on the Front Bench with me tonight—they have a completely different task. For the first time, as a result of the windfall tax, they have the resources to do the job that most people join the Employment Service to do: helping people into work. The youngsters who have been on the receiving end of the new deal, who, after the past 18 years, have every reason to be sceptical about the whole thing, are saying that the new deal works, and that the Employment Service has been transformed into an ally.
My right hon. Friend the Minister for Employment, Welfare to Work and Equal Opportunities tells of one unemployed young man visiting his local employment office for his new deal interview. As the interview went on, it dawned on the adviser that the young man had basic skills problems with reading and writing, which were preventing him from finding a job. He wondered how, tactfully, to raise that issue without appearing to be insulting, and eventually he brought into the conversation the fact that the local

college was offering a basic skills course and asked whether the young man would be willing to check it out. The young man reflected for a few moments and said, "I will go if you will come with me." So the adviser went with him. The young man signed up for the course and is now on the way to finding a job. That is how the welfare system should work, and that is the transformation, throughout the welfare system, that is heralded by the Bill.
Among disabled people, there are about a million not currently in work who would like to be if they could. We want to help them to fulfil their ambitions. We also recognise that, for others, work is not a realistic option. A modern and decent society accepts that, and must ensure that everyone, including those unable to work, shares in the prosperity and security of the rest.
The Bill starts the process of building the modern and decent welfare system that Britain desperately needs. We shall no longer abandon people simply to receiving handouts, when their position could be transformed by active help and support. The Bill is a vital step forward; I commend it to the House.

Question put, That the amendment be made:—

The House divided: Ayes 172, Noes 336.

Division No. 72]
[9.59 pm


AYES


Allan, Richard
Cran, James


Amess, David
Curry, Rt Hon David


Ancram, Rt Hon Michael
Davey, Edward (Kingston)


Arbuthnot, Rt Hon James
Davies, Quentin (Grantham)


Atkinson, David (Bour'mth E)
Davis, Rt Hon David (Haltemprice)


Atkinson, Peter (Hexham)
Dorrell, Rt Hon Stephen


Baker, Norman
Duncan Smith, Iain


Ballard, Jackie
Emery, Rt Hon Sir Peter


Beith, Rt Hon A J
Evans, Nigel


Bercow, John
Faber, David


Beresford, Sir Paul
Fabricant, Michael


Blunt, Crispin
Fallon, Michael


Body, Sir Richard
Fearn, Ronnie


Boswell, Tim
Flight, Howard


Bottomley, Peter (Worthing W)
Forth, Rt Hon Eric


Bottomley, Rt Hon Mrs Virginia
Foster, Don (Bath)


Brady, Graham
Fraser, Christopher


Brake, Tom
Gale, Roger


Brand, Dr Peter
Garnier, Edward


Brazier, Julian
George, Andrew (St Ives)


Breed, Colin
Gill, Christopher


Brooke, Rt Hon Peter
Gillan, Mrs Cheryl


Browning, Mrs Angela
Gorman, Mrs Teresa


Bruce, Ian (S Dorset)
Gorrie, Donald


Bruce, Malcolm (Gordon)
Gray, James


Burnett, John
Green, Damian


Burns, Simon
Greenway, John


Burstow, Paul
Grieve, Dominic


Butterfill, John
Gummer, Rt Hon John


Campbell, Menzies (NE Fife)
Hague, Rt Hon William


Cash, William
Hamilton, Rt Hon Sir Archie


Chapman, Sir Sydney (Chipping Barnet)
Hammond, Philip



Harris, Dr Evan


Chidgey, David
Harvey, Nick


Chope, Christopher
Hawkins, Nick


Clappison, James
Hayes, John


Clark, Rt Hon Alan (Kensington)
Heald, Oliver


Clark, Dr Michael (Rayleigh)
Heath, David (Somerton & Frome)


Clarke, Rt Hon Kenneth (Rushcliffe)
Heathcoat—Amory, Rt Hon David



Hogg, Rt Hon Douglas


Clifton-Brown, Geoffrey
Howarth, Gerald (Aldershot)


Collins, Tim
Hughes, Simon (Southwark N)


Colvin, Michael
Hunter, Andrew


Cotter, Brian
Jack, Rt Hon Michael






Jackson, Robert (Wantage)
Roe, Mrs Marion (Broxbourne)


Jenkin, Bernard
Ruffley, David


Johnson Smith, Rt Hon Sir Geoffrey 
Russell, Bob (Colchester)



St Aubyn, Nick


Jones, Nigel (Cheltenham)
Sanders, Adrian


Keetch, Paul
Sayeed, Jonathan


Key, Robert
Shepherd, Richard


King, Rt Hon Tom (Bridgwater)
Simpson, Keith (Mid-Norfolk)


Kirkbride, Miss Julie
Smith, Sir Robert (W Ab'd?ns)


Lait, Mrs Jacqui
Soames, Nicholas


Lansley, Andrew
Spicer, Sir Michael


Leigh, Edward
Spring, Richard


Lewis, Dr Julian (New Forest E)
Stanley, Rt Hon Sir John


Lidington, David
Steen, Anthony


Lilley, Rt Hon Peter
Stunell, Andrew


Livsey, Richard
Swayne, Desmond


Lloyd, Rt Hon Sir Peter (Fareham)
Syms, Robert


Loughton, Tim
Tapsell, Sir Peter


Luff, Peter
Taylor, Ian (Esher & Walton)


Lyell, Rt Hon Sir Nicholas
Taylor, John M (Solihull)


McIntosh, Miss Anne
Taylor, Matthew (Truro)


MacKay, Rt Hon Andrew
Taylor, Sir Teddy


Maclean, Rt Hon David
Townend, John


McLoughlin, Patrick
Tredinnick, David


Madel, Sir David
Trend, Michael


Malins, Humfrey
Tyler, Paul


Maude, Rt Hon Francis
Tyrie, Andrew


Mawhinney, Rt Hon Sir Brian
Viggers, Peter


May, Mrs Theresa
Walter, Robert


Moore, Michael
Waterson, Nigel


Moss, Malcolm
Webb, Steve



Whitney, Sir Raymond


Nicholls, Patrick
Whitney, Sir Raymond


Norman, Archie
Whittingdale, John


Oaten, Mark
Wilkinson, John


Öpik, Lembit
Willetts, David



Willis, Phil


Ottaway, Richard
Wilshire, David


Page, Richard
Winterton, Mrs Ann (Congleton)


Paice, James
Winterton, Nicholas (Macclesfield)


Paterson, Owen
Woodward, Shaun


Pickles, Eric
Yeo, Tim


Prior, David
Young, Rt Hon Sir George


Randall, John



Redwood, Rt Hon John
Tellers for the Ayes:


Rendel, David
Mr. Stephen Day and


Robertson, Laurence (Tewk'b'ry)
Mrs. Caroline Spelman.




NOES


Abbott, Ms Diane
Blackman, Liz


Adams, Mrs Irene (Paisley N)
Blears, Ms Hazel


Ainger, Nick
Blizzard, Bob


Ainsworth, Robert (Cov?try NE)
Blunkett, Rt Hon David


Alexander, Douglas
Boateng, Paul


Allen, Graham
Bradley, Keith (Withington)


Anderson, Donald (Swansea E)
Bradley, Peter (The Wrekin)


Anderson, Janet (Rossendale)
Bradshaw, Ben


Armstrong, Ms Hilary
Brinton, Mrs Helen


Ashton, Joe
Brown, Russell (Dumfries)


Atkins, Charlotte
Browne, Desmond


Austin, John
Buck, Ms Karen


Banks, Tony
Burden, Richard


Barnes, Harry
Burgon, Colin


Barron, Kevin
Butler, Mrs Christine


Battle, John
Byers, Rt Hon Stephen


Bayley, Hugh
Campbell, Alan (Tynemouth)


Begg, Miss Anne
Campbell, Mrs Anne (C'bridge)


Beggs, Roy
Campbell, Ronnie (Blyth V)


Bell, Martin (Tatton)
Canavan, Dennis


Bell, Stuart (Middlesbrough)
Cann, Jamie


Benn, Rt Hon Tony
Caplin, Ivor


Bennett, Andrew F
Casale, Roger


Benton, Joe
Caton, Martin


Bermingham, Gerald
Cawsey, Ian


Berry, Roger
Chapman, Ben (Wirral S)


Best, Harold
Chaytor, David


Betts, Clive
Chisholm, Malcolm





Clapham, Michael
Griffiths, Win (Bridgend)


Clark, Rt Hon Dr David (S Shields)
Gunnell, John


Clark, Paul (Gillingham)
Hain, Peter


Clarke, Charles (Norwich S)
Hall, Patrick (Bedford)


Clarke, Eric (Midlothian)
Harman, Rt Hon Ms Harriet


Clarke, Rt Hon Tom (Coatbridge)
Healey, John


Clarke, Tony (Northampton S)
Henderson, Doug (Newcastle N)


Clelland, David
Henderson, Ivan (Harwich)


Coaker, Vernon
Heppell, John


Coffey, Ms Ann
Hesford, Stephen


Cohen, Harry
Hewitt, Ms Patricia


Coleman, Iain
Hill, Keith


Connarty, Michael
Hinchliffe, David


Cook, Frank (Stockton N)
Hodge, Ms Margaret


Cooper, Yvette
Home Robertson, John


Corbett, Robin
Hoon, Geoffrey


Corbyn, Jeremy
Hope, Phil


Corston, Ms Jean
Hopkins, Kelvin


Cox, Tom
Howarth, Alan (Newport E)


Crausby, David
Howarth, George (Knowsley N)


Cryer, Mrs Ann (Keighley)
Howells, Dr Kim


Cryer, John (Hornchurch)
Hoyle, Lindsay


Cummings, John
Hughes, Ms Beverley (Stretford)


Cunliffe, Lawrence
Hughes, Kevin (Doncaster N)


Cunningham, Jim (Cov?try S)
Humble, Mrs Joan


Dafis, Cynog
Hurst, Alan


Dalyell, Tam
Hutton, John


Darling, Rt Hon Alistair
Iddon, Dr Brian


Darvill, Keith
Illsley, Eric


Davey, Valerie (Bristol W)
Ingram, Rt Hon Adam


Davidson, Ian
Jackson, Ms Glenda (Hampstead)


Davies, Rt Hon Denzil (Llanelli)
Jackson, Helen (Hillsborough)


Davies, Geraint (Croydon C)
Jamieson, David


Davies, Rt Hon Ron (Caerphilly)
Jenkins, Brian


Davis, Terry (B'ham Hodge H)
Johnson, Alan (Hull W & Hessle)


Dawson, Hilton
Johnson, Miss Melanie (Welwyn Hatfield)


Dean, Mrs Janet



Denham, John
Jones, Barry (Alyn & Deeside)


Dobbin, Jim
Jones, Helen (Warrington N)


Dobson, Rt Hon Frank
Jones, leuan Wyn (Ynys Môn)


Donaldson, Jeffrey
Jones, Dr Lynne (Selly Oak)


Doran, Frank
Jowell, Rt Hon Ms Tessa


Dowd, Jim
Kaufman, Rt Hon Gerald


Drew, David
Keeble, Ms Sally


Dunwoody, Mrs Gwyneth
Keen, Alan (Feltham & Heston)


Eagle, Angela (Wallasey)
Keen, Ann (Brentford & Isleworth)


Eagle, Maria (L'pool Garston)
Kemp, Fraser


Edwards, Huw
Kidney, David


Efford, Clive
Kilfoyle, Peter


Ellman, Mrs Louise
King, Andy (Rugby & Kenilworth)


Ennis, Jeff
Kumar, Dr Ashok


Etherington, Bill
Ladyman, Dr Stephen


Ewing, Mrs Margaret
Laxton, Bob


Field, Rt Hon Frank
Lepper, David


Fitzpatrick, Jim
Leslie, Christopher


Fitzsimons, Loma
Levitt, Tom


Flint, Caroline
Lewis, Ivan (Bury S)


Flynn, Paul
Lewis, Terry (Worsley)


Follett, Barbara
Linton, Martin


Forsythe, Clifford
Lock, David


Foster, Rt Hon Derek
Love, Andrew


Foster, Michael J (Worcester)
McAllion, John


Foulkes, George
McAvoy, Thomas


Fyfe, Maria
McCabe, Steve


Galloway, George
McCafferty, Ms Chris


Gapes, Mike
McCartney, Ian (Makerfield)


Gardiner, Barry
McDonagh, Siobhain


George, Bruce (Walsall S)
McDonnell, John


Gerrard, Neil
McGuire, Mrs Anne


Gibson, Dr Ian
McIsaac, Shona


Gilroy, Mrs Linda
McKenna, Mrs Rosemary


Godman, Dr Norman A
Mackinlay, Andrew


Goggins, Paul
McLeish, Henry


Golding, Mrs Llin
McNulty, Tony


Gordon, Mrs Eileen
Mactaggart, Fiona


Griffiths, Nigel (Edinburgh S)
McWalter, Tony






McWilliam, John
Sedgemore, Brian


Mallaber, Judy
Shaw, Jonathan


Marek, Dr John
Sheerman, Barry


Marsden, Gordon (Blackpool S)
Sheldon, Rt Hon Robert


Marshall, David (Shettleston)
Short, Rt Hon Clare


Marshall—Andrews, Robert
Simpson, Alan (Nottingham S)


Martlew, Eric
Singh, Marsha


Maxton, John
Skinner, Dennis


Meacher, Rt Hon Michael
Smith, Angela (Basildon)


Meale, Alan
Smith, Rt Hon Chris (Islington S)


Michael, Rt Hon Alun
Smith, Miss Geraldine (Morecambe & Lunesdale)


Michie, Bill (Shef'ld Heeley)



Milburn, Rt Hon Alan
Smith, John (Glamorgan)


Mitchell, Austin
Smith, Llew (Blaenau Gwent)


Moffatt, Laura
Snape, Peter


Moonie, Dr Lewis
Soley, Clive


Moran, Ms Margaret
Southworth, Ms Helen


Morgan, Ms Julie (Cardiff N)
Squire, Ms Rachel


Morgan, Rhodri (Cardiff W)
Starkey, Dr Phyllis


Morley, Elliot
Steinberg, Gerry


Morris, Ms Estelle (B'ham Yardley)
Stevenson, George


Mountford, Kali
Stewart, Ian (Eccles)


Mudie, George
Stinchcombe, Paul


Mullin, Chris
Stoate, Dr Howard


Murphy, Denis (Wansbeck)
Stott, Roger


Murphy, Jim (Eastwood)
Strang, Rt Hon Dr Gavin


Naysmith, Dr Doug
Stuart, Ms Gisela


Norris, Dan
Sutcliffe, Gerry


O'Brien, Bill (Normanton)
Taylor, Rt Hon Mrs Ann (Dewsbury)


O'Brien, Mike (N Warks)



O'Hara, Eddie
Taylor, David (NW Leics)


Olner, Bill
Taylor, Rt Hon John D (Strangford)


Organ, Mrs Diana
Temple—Morris, Peter


Osborne, Ms Sandra
Thomas, Gareth (Clwyd W)


Palmer, Dr Nick
Thomas, Gareth R (Harrow W)


Pearson, Ian
Timms, Stephen


Pendry, Tom
Touhig, Don


Perham, Ms Linda
Trickett, Jon


Pickthall, Colin
Truswell, Paul


Pike, Peter L
Turner, Dennis (Wolverh'ton SE)


Plaskitt, James
Turner, Dr Desmond (Kemptown)


Pond, Chris
Turner Dr George (NW Norfolk)


Pope, Greg
Twigg, Derek (Halton)


Pound, Stephen
Twigg, Stephen (Enfield)


Powell, Sir Raymond
Vaz, Keith


Prentice, Ms Bridget (Lewisham E)
Walley, Ms Joan



Wareing, Robert N


Prentice, Gordon (Pendle)
Watts, David


Prescott, Rt Hon John
Welsh, Andrew


Primarolo, Dawn
White, Brian


Prosser, Gwyn
Whitehead, Dr Alan


Purchase, Ken
Wicks, Malcolm


Quin, Rt Hon Ms Joyce
Wigley, Rt Hon Dafydd


Quinn, Lawrie
Williams, Rt Hon Alan (Swansea W)


Raynsford, Nick



Reid, Rt Hon Dr John (Hamilton N)
Williams, Alan W (E Carmarthen)


Robertson, Rt Hon George (Hamilton S)
Wills, Michael



Winnick, David


Robinson, Geoffrey (Cov'try NW)
Winterton, Ms Rosie (Doncaster C)


Roche, Mrs Barbara
Wise, Audrey


Rogers, Allan
Woolas, Phil


Rooker, Jeff
Wray, James


Ross, Ernie (Dundee W)
Wright, Anthony D (Gt Yarmouth)


Rowlands, Ted
Wright, Dr Tony (Cannock)


Ruddock, Joan
Wyatt, Derek


Russell, Ms Christine (Chester)



Salmond, Alex
Tellers for the Noes:


Salter, Martin
Mr. Mike Hall and


Savidge, Malcolm
Mr. David Hanson.

Question accordingly negatived.

Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on Second or Third Reading):—

The House divided: Ayes 318, Noes 180.

Division No. 73]
[10.14 pm


AYES


Abbott, Ms Diane
Cryer, Mrs Ann (Keighley)


Adams, Mrs Irene (Paisley N)
Cryer, John (Hornchurch)


Ainger, Nick
Cummings, John


Ainsworth, Robert (Cov'try NE)
Cunliffe, Lawrence


Alexander, Douglas
Cunningham, Jim (Cov'try S)


Allen, Graham
Dalyell, Tam


Anderson, Donald (Swansea E)
Darling, Rt Hon Alistair


Anderson, Janet (Rossendale)
Darvill, Keith


Armstrong, Ms Hilary
Davey, Valerie (Bristol W)


Ashton, Joe
Davidson, Ian


Atkins, Charlotte
Davies, Rt Hon Denzil (Llanelli)


Austin, John
Davies, Geraint (Croydon C)


Banks, Tony
Davies, Rt Hon Ron (Caerphilly)


Barnes, Harry
Davis, Terry (B'ham Hodge H)


Barron, Kevin
Dawson, Hilton


Battle, John
Dean, Mrs Janet


Bayley, Hugh
Denham, John


Begg, Miss Anne
Dobbin, Jim


Beggs, Roy
Dobson, Rt Hon Frank


Bell, Martin (Tatton)
Donaldson, Jeffrey


Bell, Stuart (Middlesbrough)
Doran, Frank


Bennett, Andrew F
Dowd, Jim


Benton, Joe
Drew, David


Bermingham, Gerald
Eagle, Angela (Wallasey)


Berry, Roger
Eagle, Maria (L'pool Garston)


Best, Harold
Edwards, Huw


Betts, Clive
Efford, Clive


Blackman, Liz
Ellman, Mrs Louise


Blears, Ms Hazel
Ennis, Jeff


Blizzard, Bob
Etherington, Bill


Blunkett, Rt Hon David
Field, Rt Hon Frank


Boateng, Paul
Fitzpatrick, Jim


Bradley, Keith (Withington)
Fitzsimons, Lorna


Bradley, Peter (The Wrekin)
Flint, Caroline


Bradshaw, Ben
Flynn, Paul


Brinton, Mrs Helen
Follett, Barbara


Brown, Russell (Dumfries)
Forsythe, Clifford


Browne, Desmond
Foster, Rt Hon Derek


Buck, Ms Karen
Foster, Michael J (Worcester)


Burden, Richard
Foulkes, George


Burgon, Colin
Fyfe, Maria


Butler, Mrs Christine
Galloway, George


Byers, Rt Hon Stephen
Gapes, Mike


Campbell, Alan (Tynemouth)
Gardiner, Barry


Campbell, Mrs Anne (C'bridge)
George, Bruce (Walsall S)


Campbell, Ronnie (Blyth V)
Gerrard, Neil


Canavan, Dennis
Gibson, Dr Ian


Cann, Jamie
Gilroy, Mrs Linda


Caplin, Ivor
Godman, Dr Norman A


Casale, Roger
Goggins, Paul


Caton, Martin
Golding, Mrs Llin


Cawsey, Ian
Gordon, Mrs Eileen


Chapman, Ben (Wirral S)
Griffiths, Nigel (Edinburgh S)


Chaytor, David
Griffiths, Win (Bridgend)


Chisholm, Malcolm
Gunnell, John


Clapham, Michael
Hain, Peter


Clark, Rt Hon Dr David (S Shields)
Hall, Patrick (Bedford)


Clark, Paul (Gillingham)
Harman, Rt Hon Ms Harriet


Clarke, Charles (Norwich S)
Healey, John


Clarke, Eric (Midlothian)
Henderson, Doug (Newcastle N)


Clarke, Rt Hon Tom (Coatbridge)
Henderson, Ivan (Harwich)


Clarke, Tony (Northampton S)
Heppell, John


Clelland, David
Hesford, Stephen


Coaker, Vernon
Hewitt, Ms Patricia


Coffey, Ms Ann
Hill, Keith


Cohen, Harry
Hinchliffe, David


Coleman, Iain
Hodge, Ms Margaret


Connarty, Michael
Home Robertson, John


Cook, Frank (Stockton N)
Hoon, Geoffrey


Cooper, Yvette
Hope, Phil


Corbett, Robin
Hopkins, Kelvin


Corston, Ms Jean
Howarth, Alan (Newport E)


Crausby, David
Howarth, George (Knowsley N)






Howells, Dr Kim
Mountford, Kali


Hoyle, Lindsay
Mudie, George


Hughes, Ms Beverley (Stretford)
Mullin, Chris


Hughes, Kevin (Doncaster N)
Murphy, Denis (Wansbeck)


Humble, Mrs Joan
Murphy, Jim (Eastwood)


Hurst, Alan
Naysmith, Dr Doug


Hutton, John
Norris, Dan


Iddon, Dr Brian
O'Brien, Bill (Normanton)


Illsley, Eric
O'Brien, Mike (N Warks)


Ingram, Rt Hon Adam
O'Hara, Eddie


Jackson, Ms Glenda (Hampstead)
Olner, Bill


Jackson, Helen (Hillsborough)
Organ, Mrs Diana


Jamieson, David
Osborne, Ms Sandra


Jenkins, Brian
Palmer, Dr Nick


Johnson, Alan (Hull W & Hessle)
Pearson, Ian


Johnson, Miss Melanie (Welwyn Hatfield)
Pendry, Tom



Perham, Ms Linda


Jones, Barry (Alyn & Deeside)
Pickthall, Colin


Jones, Helen (Warrington N)
Pike, Peter L


Jones, Dr Lynne (Selly Oak)
Plaskitt, James


Jowell, Rt Hon Ms Tessa
Pond, Chris


Kaufman, Rt Hon Gerald
Pope, Greg


Keeble, Ms Sally
Pound, Stephen


Keen, Alan (Feltham & Heston)
Prentice, Ms Bridget (Lewisham E)


Keen, Ann (Brentford & Isleworth)
Prentice, Gordon (Pendle)


Kemp, Fraser
Prescott, Rt Hon John


Kidney, David
Primarolo, Dawn


Kilfoyle, Peter
Prosser, Gwyn


King, Andy (Rugby & Kenilworth)
Purchase, Ken


Kumar, Dr Ashok
Quin, Rt Hon Ms Joyce


Ladyman, Dr Stephen
Quinn, Lawrie


Laxton, Bob
Raynsford, Nick


Lepper, David
Reid, Rt Hon Dr John (Hamilton N)


Leslie, Christopher
Robertson, Rt Hon George (Hamilton S)


Levitt, Tom



Lewis, Ivan (Bury S)
Roche, Mrs Barbara


Lewis, Terry (Worsley)
Rooker, Jeff


Linton, Martin
Ross, Ernie (Dundee W)


Lock, David
Rowlands, Ted


Love, Andrew
Ruddock, Joan


McAllion, John
Russell, Ms Christine (Chester)


McAvoy, Thomas
Salter, Martin


McCabe, Steve
Savidge, Malcolm


McCafferty, Ms Chris
Sedgemore, Brian


McCartney, Ian (Makerfield)
Shaw, Jonathan


McDonagh, Siobhain
Short, Rt Hon Clare


McDonnell, John
Simpson, Alan (Nottingham S)


McGuire, Mrs Anne
Singh, Marsha


McIsaac, Shona
Skinner, Dennis


McKenna, Mrs Rosemary
Smith, Angela (Basildon)


Mackinlay, Andrew
Smith, Rt Hon Chris (Islington S)


McLeish, Henry
Smith, Miss Geraldine (Morecambe & Lunesdale)


McNulty, Tony



Mactaggart, Fiona
Smith, John (Glamorgan)


McWalter, Tony
Smith, Llew (Blaenau Gwent)


McWilliam, John
Snape, Peter


Mallaber, Judy
Soley, Clive


Marek, Dr John
Southworth, Ms Helen


Marsden, Gordon (Blackpool S)
Squire, Ms Rachel


Marshall, David (Shettleston)
Starkey, Dr Phyllis


Marshall—Andrews, Robert
Steinberg, Gerry


Martlew, Eric
Stevenson, George


Maxton, John
Stewart, Ian (Eccles)


Meacher, Rt Hon Michael
Stinchcombe, Paul


Meale, Alan
Stoate, Dr Howard


Michael, Rt Hon Alun
Strang, Rt Hon Dr Gavin


Michie, Bill (Shef'ld Heeley)
Stuart, Ms Gisela


Milburn, Rt Hon Alan
Sutcliffe, Gerry


Mitchell, Austin
Taylor, Rt Hon Mrs Ann (Dewsbury)


Moffatt, Laura



Moonie, Dr Lewis
Taylor, David (NW Leics)


Moran, Ms Margaret
Taylor, Rt Hon John D (Strangford)


Morgan, Ms Julie (Cardiff N)
Temple—Morris, Peter


Morgan, Rhodri (Cardiff W)
Thomas, Gareth (Clwyd W)


Morley, Elliot
Thomas, Gareth R (Harrow W)


Morris, Ms Estelle (B'ham Yardley)
Timms, Stephen





Touhig, Don
Wicks, Malcolm


Trickett, Jon
Williams, Alan W (E Carmarthen)


Truswell, Paul
Wills, Michael


Turner, Dennis (Wolverh'ton SE)
Winterton, Ms Rosie (Doncaster C)


Turner, Dr Desmond (Kemptown)
Wise, Audrey


Turner, Dr George (NW Norfolk)
Woolas, Phil


Twigg, Derek (Halton)
Wray, James


Twigg, Stephen (Enfield)
Wright Anthony D (Gt Yarmouth)


Vaz, Keith
Wright, Dr Tony (Cannock)


Walley, Ms Joan
Wyatt, Derek


Wareing, Robert N



Watts, David
Tellers for the Ayes:


White, Brian
Mr. Mike Hall and


Whitehead, Dr Alan
Mr. David Hanson.




NOES


Allan, Richard
Flight, Howard


Amess, David
Forth, Rt Hon Eric


Ancram, Rt Hon Michael
Foster, Don (Bath)


Arbuthnot, Rt Hon James
Fraser, Christopher


Ashdown, Rt Hon Paddy
Gale, Roger


Atkinson, David (Bour'mth E)
Garnier, Edward


Atkinson, Peter (Hexham)
George, Andrew (St Ives)


Baker, Norman
Gill, Christopher


Ballard, Jackie
Gillan, Mrs Cheryl


Beith, Rt Hon A J
Gorman, Mrs Teresa


Bercow, John
Gorrie, Donald


Beresford, Sir Paul
Gray, James


Blunt, Crispin
Green, Damian


Body, Sir Richard
Greenway, John


Boswell, Tim
Grieve, Dominic


Bottomley, Peter (Worthing W)
Gummer, Rt Hon John


Bottomley, Rt Hon Mrs Virginia
Hague, Rt Hon William


Brady, Graham
Hamilton, Rt Hon Sir Archie


Brake, Tom
Hammond, Philip


Brand, Dr Peter
Harris, Dr Evan


Brazier, Julian
Harvey, Nick


Breed, Colin
Hawkins, Nick


Brooke, Rt Hon Peter
Hayes, John


Browning, Mrs Angela
Heald, Oliver


Bruce, Ian (S Dorset)
Heath, David (Somerton & Frome)


Bruce, Malcolm (Gordon)
Heathcoat-Amory, Rt Hon David


Burnett, John
Hogg, Rt Hon Douglas


Burns, Simon
Howarth, Gerald (Aldershot)


Burstow, Paul
Hughes, Simon (Southwark N)


Butterfill, John
Hunter, Andrew


Campbell, Menzies (NE Fife)
Jack, Rt Hon Michael


Cash, William
Jackson, Robert (Wantage)


Chapman, Sir Sydney (Chipping Barnet)
Jenkin, Bernard



Johnson Smith, Rt Hon Sir Geoffrey


Chidgey, David



Chope, Christopher
Jones, leuan Wyn (Ynys Môn)


Clappison, James
Jones, Nigel (Cheltenham)


Clark, Rt Hon Alan (Kensington)
Keetch, Paul


Clark, Dr Michael (Rayleigh)
Key, Robert


Clarke, Rt Hon Kenneth (Rushcliffe)
King, Rt Hon Tom (Bridgwater)



Kirkbride, Miss Julie


Clifton—Brown, Geoffrey
Kirkwood, Archy


Collins, Tim
Lait, Mrs Jacqui


Colvin, Michael
Lansley, Andrew


Cotter, Brian
Leigh, Edward


Cran, James
Lewis, Dr Julian (New Forest E)


Curry, Rt Hon David
Lidington, David


Dafis, Cynog
Lilley, Rt Hon Peter


Davey, Edward (Kingston)
Livsey, Richard


Davies, Quentin (Grantham)
Lloyd, Rt Hon Sir Peter (Fareham)


Davis, Rt Hon David (Haltemprice)
Loughton, Tim


Dorrell, Rt Hon Stephen
Luff, Peter


Duncan Smith, Iain
Lyell, Rt Hon Sir Nicholas


Emery, Rt Hon Sir Peter
McIntosh, Miss Anne


Evans, Nigel
MacKay, Rt Hon Andrew


Ewing, Mrs Margaret
Maclean, Rt Hon David


Faber, David
McLoughlin, Patrick


Fabricant, Michael
Madel, Sir David


Fallon, Michael
Malins, Humfrey


Feam, Ronnie
Maude, Rt Hon Francis






Mawhinney, Rt Hon Sir Brian
Stunell, Andrew


May, Mrs Theresa
Swayne, Desmond


Michie, Mrs Ray (Argyll & Bute)
Syms, Robert


Moore, Michael
Tapsell, Sir Peter


Moss, Malcolm
Taylor, Ian (Esher & Walton)


Nicholls, Patrick
Taylor, John M (Solihull)


Norman, Archie
Taylor, Matthew (Truro)


Oaten, Mark
Taylor, Sir Teddy


Öpik, Lembit
Townend, John


Ottaway, Richard
Tredinnick, David


Page, Richard
Trend, Michael


Paice, James
Tyler, Paul


Paterson, Owen
Tyrie, Andrew


Pickles, Eric
Viggers, Peter


Prior, David
Walter, Robert


Randall, John
Waterson, Nigel


Redwood, Rt Hon John
Webb, Steve


Rendel, David
Welsh, Andrew


Robertson, Laurence (Tewk'b'ry)
Whitney, Sir Raymond


Roe, Mrs Marion (Broxbourne)
Whittingdale, John


Ruffley, David
Wigley, Rt Hon Dafydd


Russell, Bob (Colchester)
Wilkinson, John



Willetts, David


St Aubyn, Nick
Willis, Phil


Salmond, Alex
Wilshire, David


Sanders, Adrian
Winterton, Mrs Ann (Congleton)


Sayeed, Jonathan
Winterton, Nicholas (Macclesfield)


Shepherd, Richard
Woodward, Shaun


Simpson, Keith (Mid-Norfolk)
Yeo, Tim


Smith, Sir Robert (W Ab'd?ns)
Young, Rt Hon Sir George


Soames, Nicholas



Spicer, Sir Michael
Tellers for the Noes:


Spring, Richard
Mr. Stephen Day and


Stanley, Rt Hon Sir John
Mrs. Caroline Spelman.

Question accordingly agreed to.

Bill read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).

Orders of the Day — WELFARE REFORM AND PENSIONS BILL [MONEY]

Queen's recommendation having been signified—

Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a),
That, for the purposes of any Act resulting from the Welfare Reform and Pensions Bill, it is expedient to authorise—

(1) the payment out of money provided by Parliament of—

(a) any expenditure incurred by a Minister of the Crown or government department under the Act;
(b) any increase attributable to the Act in the sums which under any other Act are payable out of money so provided;

(2) the payment out of the Consolidated Fund of any increase attributable to the Act in the sums which under any other Act are payable out of that Fund.—[Mr. Allen.]

Question agreed to.

Orders of the Day — WELFARE REFORM AND PENSIONS BILL [WAYS AND MEANS]

Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a),
That, for the purposes of any Act resulting from the Welfare Reform and Pensions Bill, it is expedient to authorise—

(a) payments out of the National Insurance Fund into the Consolidated Fund in respect of expenditure incurred by the Secretary of State under the Act;
(b) any increase attributable to the Act in the sums which under any other Act are payable into the Consolidated Fund.—[Mr. Allen.]

Question agreed to.

Orders of the Day — FINANCIAL SERVICES AND MARKETS

Resolved,
That it is expedient that a Joint Committee of Lords and Commons be appointed to report on the consultative document on the draft financial services and markets bill presented by Her Majesty's Command on 21st December 1998 and any further draft of the bill which may be laid upon the Table of both Houses by a Minister of the Crown and to report by 30th April 1999.—[Mr. Allen.]
To be communicated to the Lords, and their concurrence desired thereto.

Orders of the Day — DELEGATED LEGISLATION

Ordered,
That the Local Authorities (Alteration of Requisite Calculations) (England) Regulations 1999 (S.I., 1999, No. 228) be referred to a Standing Committee on Delegated Legislation.—[Mr. Allen.]

Mr. Andrew Mackinlay: On a point of order, Mr. Deputy Speaker. I wonder whether you can help me. I understand that this afternoon my right hon. Friend the Foreign Secretary gave some written replies to the hon. Member for Chesham and Amersham (Mrs. Gillan). I have been to the Library in the past 15 minutes to see them, but they are not there. I have gone to the Press Gallery, but they are not available there. All hon. Members are entitled to see written answers. I understand that answers from the Foreign Office are often the latest to arrive. I want to see those replies tonight. If they are available to some hon. Members, they should be available to the whole House.

Mr. Deputy Speaker: That is not a matter for the Chair. No doubt the House and those on the Front Bench will have heard the hon. Gentleman's point.

Orders of the Day — Cornish Language

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]

Mr. Andrew George: In many ways, I wish that there had been no need for the debate. I wish that the self-evident case for the official recognition of the Cornish language was accepted for the foregone conclusion that it should be. That may still be so, but the primary point of raising the issue this evening is that the Foreign Office has not yet been informed which of the home Departments has the capacity and responsibility to assess the case. I am not apportioning blame for that, because it has been so for many years. It is not the fault of this Government.
During the debate, I should like to explain the growing interest in the revival of the Cornish language; the fact that Cornwall wants to make a small but significant contribution to the celebration of the diversity of cultures and languages throughout the British Isles and Europe; and to make the case for the official recognition of the Cornish language.
Cornish is one of the Brythonic Celtic languages, which include Welsh, Breton and, originally, Cumbrian. The related languages of Scottish Gaelic, Irish and Manx are known are known as Goidelic and are based on a different spelling system.
Even at the time of the Prayer Book rebellion 450 years ago in 1549, which was a reaction to Parliament passing the first Act of Uniformity, people in many areas of Cornwall, including most of west Cornwall, understood little English. Place names throughout Cornwall bear witness to that.
We have to keep everything in proportion. The Cornish language is not now a life and death issue, but in 1549 it was. Many Cornish people protesting against the imposition of an English Prayer book were massacred by the King's army. Their leaders were executed and the people suffered numerous reprisals.
The Cornish language is supposed to have died out in about 1800—a year after the death of Dolly Pentreath, whose native language it was and who could speak little English. However, it carried on throughout the 19th century and into the 20th century. Even in my constituency of St. Ives, fishermen were counting fish in the Cornish language into the 1940s. In the early part of the century, my grandparents on the Lizard were speaking Cornish in a dialect form at home, and a dialect form of Cornish continues to this day in some areas.
One might ask the extent to which the language is now spoken. The night before last, I was judging the finals of the Pan-Celtic song for Cornwall competition on local radio. There were 32 entries—all sung in the Cornish language—in a variety of genres from folk to classical, rock, punk, indie and rap. Many groups were young people. One of the finalists consisted of five members with an average age of 14. Some of it was fairly ordinary, but the majority was impressive, and the finalists were breathtaking.
It is estimated that there are approximately 3,000 Cornish speakers. Many thousands more are like me, and either speak some Cornish or have a knowledge of the

language. The vast majority, if not the whole population, see Cornish as an emblem of pride. Cornish, of course, exists in place names, and a knowledge of the language really helps to read the landscape. Many Cornish names are adopted for children, pets, houses and boats.
Cornwall county council has an established policy to support the language, and last week passed a motion supporting it being specified within the European charter for regional or minority languages. There are at least three regular periodicals solely in the language—An Gannas, An Gowser and An Garrick. The two local radio stations, Radio Cornwall and Pirate FM, have regular news broadcasts in Cornish, and have other programmes and features for learners and enthusiasts.
Local newspapers such as the Western Morning News have regular articles in Cornish, and newspapers such as The Packet, The West Briton and The Cornishman have also supported the movement. The St Ives Times & Echo felt so confident about local knowledge of the language that it circulated Christmas messages and cards saying
Nadelek Lowen ha Blethen Noweth da
and offered no translation to the English version
Wishing You a Merry Christmas and a Happy New Year".
The language has financial sponsorship from many sources, including the Millennium Commission. The Bishop's advisory committee on Cornish language services provides advice and support to churches wishing to use the language. Increasingly, churches have visitors' instructions in Cornish and English.
The take-up of the language is now becoming so widespread that organisations such as Kevas an taves Kernewek, the Cornish Language Board, are finding it difficult to keep up with demand. Others include the Cornish sub-group of the European bureau for lesser-used languages, Teere ha Tavas—or land and language—Gorseth Kernow, Cussel an Tavas Kernuack, Cowethas an Yeth, Agan Tavas and Dalleth, the last of which is the organisation promoting language to pre-school children. There are many popular ceremonies—some ancient, some modern—which either use the language or are entirely in the language.
Cornwall has many other cultural events associated with the language, including the prestigious international Celtic film festival, which we hosted in St. Ives in 1997, with the programme in Cornish, English and French. There are many films—some televised—made entirely, or significantly, in the language; the latest on the Cornish surfing culture.
Commercially, Cornish is taking off, with shops selling only Cornish material, such as An Lyverjy Kernewak, the Cornish book shop in the town of Helston in the south of my constituency. Many companies are preferring to use Cornish names, and the GP overnight service in the county is now called Kernowdoc. A great deal now goes on in our schools—more than in my day—and there are many who study Cornish at degree level in places such as Aberystwyth, Wales, and Harvard, USA.
One may ask what benefit that brings. In a world where many commercial and multinational forces are producing bland uniformity, people want to hold on to—and even develop—the fragments of cultural remains. In Cornwall, I would argue that we have more than simply fragments, and we generate significant cultural tourism not only in itself, but as an added dimension to the tourist experience.
That has also been significant in helping Cornwall and the Isles of Scilly to secure objective 1 status, which we hope will be secured at the end of March in the next EU funding programme. Eurostat, in its statement agreeing to the splitting of Cornwall from Devon for statistical purposes, made very specific reference to
Cornwall's … distinctive cultural and historic factors reflecting a Celtic background.
Before Cornish can rightfully take its place as an officially recognised language, we need to sort out which Department is responsible for assessing Cornwall's case for being specified under part II of the European charter for regional or minority languages. It has been considered by the Department for Education and Employment, the Home Office, the Department for Culture, Media and Sport, the Department of the Environment, Transport and the Regions and the Welsh Office; I have asked the Cabinet Office to determine responsibility, but it has put the question back to the Foreign Office.
Cornwall has an unassailable case for being specified under part II, and some argue that it should also be specified under part III of the charter, but it cannot get to the starting blocks because no Department recognises its responsibility.

Mr. Paul Flynn: Before the hon. Gentleman came to the House, I tabled questions about the Cornish language; one was answered by the Secretary of State for Wales, and the next by the Minister for Sport. The Government seem to have difficulty in identifying where Cornwall is.
It is a great joy to hear the hon. Gentleman's pronunciation of Cornish. Every word that he has said in Cornish is immediately understandable to a Welsh speaker. There is great enthusiasm for his case and we hope that it will find a willing audience in the Foreign Office Minister—that gives an extraordinary view of how central Government see Cornwall—who will respond tonight.

Mr. George: Perhaps not so extraordinary. I am very grateful to the hon. Gentleman, and I entirely agree with him. I said earlier that the present Government are not to blame for the problem, but this needs to be sorted out and one Department must take responsibility. We need to know what other hurdles the Cornish language needs to get over to secure recognition under the charter.
The framework convention for the protection of national minorities is also often mentioned in Cornwall. The Government say that they will apply the convention to those groups that fall under the definition of a racial group as set out in the Race Relations Act 1976. As is reasonable, the Government are determined that the Cornish are not a racial group under the Act because there have not been any court rulings on whether it is possible to be discriminated against on the ground of being Cornish. That is right and proper. Cornwall is not claiming that its people are a racial group or that Cornish people, however defined, experience significant discrimination or prejudice.
The problem is whether the Home Office has interpreted the question correctly. It cannot be held that it is necessary to be discriminated against to qualify as a

minority or a racial group. As the Government cannot justify defining groups by referring to national legislation, do they not accept that, in international law, the view is generally held that the existence of a minority is a question of fact, not of law?
I am concerned that article 16 of the framework convention is interpreted by a tiny and extreme minority as being usable to justify policies that control or influence population mix. I seek a reassurance that that sinister interpretation is unacceptable to all. If recognising the Cornish language and culture could be interpreted in that way, we would all oppose it. Surely, European charters and conventions are intended to contribute to a celebratory and constructive role for languages and cultures, not to narrow isolationism.
The debate about how a group is identified as a minority could lead us to a nil sum gain argument which gets everyone nowhere. I refer the Minister back to the preamble of the framework convention, which reflects its spirit. It says:
Considering that the creation of a climate of tolerance and dialogue is necessary to enable cultural diversity to be a source and a factor not of division but of enrichment for each society".
It is exactly that enrichment, and not division, that the Cornish language and the identity of its people can contribute.
If Cornwall is to play its full part and achieve its full potential in celebrating the diversity of cultures and languages in the British isles and Europe, it should not be excluded from the European charters as that hinders and damages the emerging self-belief and confidence of the language and cultural revival.
Let me reassure the House—the movement is inclusive. It is not about the Cornish wanting to cut themselves off, but about their wanting to cut into what is going on in a wider Europe. It is not the plaintive cries of the "Stop the world, I want to get off? brigade, because Cornwall wants to get on and get involved. It is time to let Cornish take its proper place, agree a home Department to assess Cornwall's case and move it forward into the charter. After all, it would be absurd not to include Cornish in part II of the charter. Then we could get on with life.
I must emphasise that Cornwall has been going through an exciting and positive revolution in recent years, and it has seen a growing interest in things Cornish. I am particularly proud to say that that is happening in an environment of harmony and celebration. Indeed, when the Keskerdh Kernow, the Cornwall march, took place from St. Keverne in my constituency to London in 1997, the walkers included those who were Cornish born and bred and those who, without apology or explanation, claimed no Cornish ancestry but a love for and commitment to Cornwall. Although there will always be a few absurd and silly people who would prefer things otherwise, that showed the maturity of the modern Cornish community, with Cornish people and those who would not necessarily define themselves as Cornish—although I would—walking shoulder to shoulder and standing up for Cornwall.
We are concentrating on positives and looking outward. We want to contribute to the celebration of diversity for positive reasons only. Perhaps soon Cornwall will host a festival of culture from around the British isles and, among the colour of multiculturalism, a Minister may come along and play her Northumbrian pipes. There is


an old saying in Cornwall—karensa a vynsa, covatys ny vynsa—which, roughly translated, means "love would, greed wouldn't". That is what Cornwall is trying to say. It is not self-seeking, but seeking to be included. I urge the Minister to help us to be included in the charters.

The Minister of State, Foreign and Commonwealth Office (Ms Joyce Quin): I congratulate the hon. Member for St. Ives (Mr. George) on winning this Adjournment debate and speaking on an issue that I know is dear to his heart and to which he has drawn the attention of hon. Members and my ministerial colleagues on several occasions. As he recognised at the end of his speech, I share strongly his beliefs in the importance of regional cultures and traditions and the need to encourage and welcome diversity at the various levels of government in the United Kingdom, the European Union and other institutions, such as the Council of Europe, to which he referred. As a Geordie with a keen interest in the distinctive folk music of my own region, I sympathise with the hon. Gentleman's views, although my playing of the Northumbrian pipes might not be very tuneful to the ears of his constituents.
I am also aware of the interest shown in the subject by the presence of several hon. Members in the Chamber tonight. The Foreign Office's involvement in the debate relates to the fact that my Department has the lead on Council of Europe issues and the charter for regional minority languages, which the hon. Member for St. Ives mentioned, was set up by that body. I must apologise for the absence of my fellow Minister of State, my hon. Friend the Member for Manchester, Central (Mr. Lloyd), who has taken an interest in this issue and recently met the hon. Gentleman, representatives of interested Cornish groups and language experts. My hon. Friend is on a ministerial visit to Africa and regrets that he is unable to be present this evening.
I wish to make clear beyond any doubt the degree of commitment that the Government have to Cornwall. In doing so, I take issue with the comments made by my hon. Friend the Member for Newport, West (Mr. Flynn) with whom I normally have much sympathy. I can tell him firmly that we are well aware of where Cornwall is on the map and, given the efforts that the Government have put in to securing objective 1 status for Cornwall, I am sure that that will be clear to all the inhabitants of Cornwall. We have a strong commitment to that part of the country and it is an important part of our overall devolution strategy that the regions of England should have greater economic vitality in a decentralised framework. Devolution ensures that many decisions affecting people's day-to-day lives will be taken locally, and that those decisions will take into account local needs, conditions and history.
The creation in the English regions of regional development agencies will benefit Cornwall. Those agencies will help to promote sustainable economic development and will co-ordinate support for business development, including inward investment, training and regeneration. In general, their work will help to develop Cornwall's economy and make Cornwall competitive.
Cornwall and the Isles of Scilly make up one of four areas scheduled to get objective 1 status as a result of the reform of the structural funds in the Agenda 2000

negotiations. The change has come about following lengthy negotiations, in which it was agreed that Cornwall should not continue to be considered as part of a single region, along with Devon, for structural fund purposes. Cornwall's gross domestic product is only 70 per cent. of the European Union average, and so we expect it to qualify for generous EU assistance designed to promote the development and structural adjustment of the area. Financing from Europe may be for as much as 75 per cent. of projects.
It will be up to the regional and local authorities to co-ordinate how the funds should be spent, but a number of sectors of the Cornish economy could get support, including small business development, rural and coastal areas, and the information and communications industries. Structural funds can also be used to promote investors in people. The designation of objective 1 status is a valuable opportunity, although careful planning will be needed to maximise the benefit. I understand that the regional authorities already have programme planning in mind.
Secondly, the hon. Member for St. Ives spoke about the framework convention for the protection of national minorities. The framework convention guarantees people belonging to national minorities equality before the law and freedom from discrimination. Signatories to the convention agree to adopt, where necessary, measures to promote full and effective equality between minority and majority groups in all areas of economic, social, political and cultural life.
The Government ratified the convention to underline our commitment to tackling racism and xenophobia, in the United Kingdom and across Europe. It is true that the Government have received representations from a relatively small number of people in Cornwall who are seeking recognition of the Cornish people as a national minority under the convention. However, as the hon. Member for St. Ives recognised, very reasonably, the Government clarified their position in response to a series of parliamentary questions in October. The Government said that, for the purposes of the convention, they would base their interpretation of the term "racial group" on the definition set out in the Race Relations Act 1976. That legislations defines a racial group as
a group of persons defined by colour, race, nationality (including citizenship) or ethnic or national origins.

Mr. Paul Tyler: Do other members of the Council of Europe take the same line on the definition of a racial group? I understand that they do not. If there were a divergence in the definition used by different member states, that would be unfortunate, as it could be interpreted to mean that the British Government are discriminating against the Cornish, and that other minority languages and cultures are treated differently.

Ms Quin: I would prefer to let the hon. Gentleman know in writing the position of other member states, as we understand it. In part, that is because my hon. Friend the Minister of State has had much more contact with the Council of Europe than I. However, the Government are not aware of any rights granted under the framework convention that are denied to people in Cornwall. Indeed, we would be very concerned to hear of any specific barriers preventing people from freely maintaining and expressing their culture and identity.
Obviously, the convention aims to address the position of minorities across Europe as a whole. I can reassure the hon. Member for St. Ives that we most definitely do not intend to justify policies aimed at preventing natural changes in the racial or ethnic balance of a particular region. That would be totally perverse. Such an interpretation would clearly contravene the spirit of the convention, particularly article 2, which states:
The provisions of this framework Convention shall be applied in good faith, in a spirit of understanding and tolerance and in conformity with the principles of good neighbourliness, friendly relations and cooperation between States.
Such an interpretation would also be contrary to human rights as defined in the European convention on human rights, and it would contravene the welcome addition made to the Amsterdam treaty when we, along with our European Union partners, introduced a non-discrimination clause. All that reinforces our understanding that the convention should not be misused in the way that the hon. Gentleman rightly raises as a danger.
The hon. Gentleman's main point related to the status of the Cornish language under the Council of Europe's charter for regional or minority languages. He asked how the Government choose to deal with the issue. The charter places legal obligations on contracting parties regarding regional or minority languages spoken in their territories. Regional or minority languages are defined as those that are
traditionally used within a given territory of a State by nationals of that State who form a group numerically smaller than the rest of the State's population; and
which are
different from the official languages of the State.
Under the charter, languages can be specified in two categories. Under part II, states commit themselves to base their policies, legislation and practice in respect of minority or regional languages on specified objectives and principles. Should a state decide to specify a regional or minority language under part III of the charter, the state is required to promote its use in public life. That is done by applying several paragraphs from part III, which cover education, justice, public services, the media, cultural activities and facilities, and economic and social life. In other words, they are very wide ranging.

Mr. Flynn: Will my right hon. Friend give way?

Ms Quin: I am sorry; I must address the key points raised and I am afraid that I shall not have time if I give way.
The Minister of State, my right hon. Friend the Member for Leeds, Central, told the House last June that the Government intended to adhere to the charter. He said that, at the time of ratification of the charter, we would specify the Welsh language in Wales and the Gaelic language in Scotland. My right hon. Friend the Secretary of State for Scotland informed my Department that the lengthy process of identifying which minimum of the 35 paragraphs or sub-paragraphs are to be applied to Gaelic in Scotland has now been completed. My right hon. Friend the Secretary of State for Wales hopes shortly to be in a similar position with regard to the Welsh language.
Once the process is complete, we intend to ratify the charter. I am sure that hon. Members will agree that this is a suitable year in which to do so, as it is the 50th anniversary of the founding of the Council of Europe.
I am well aware, particularly having heard the hon. Member for St. Ives this evening, that the hon. Gentleman regrets the fact that the Government have not yet taken a position on Cornish. It is a complicated issue, and the hon. Gentleman will appreciate that consideration of regional languages in Scotland, Wales and Northern Ireland are matters for the relevant Secretaries of State. For Cornish, the charter raises issues that touch on the responsibilities of a number of Departments. There are implications for education, culture, transport, the judicial system and the whole range of public services in Cornwall.
The hon. Gentleman was given an assurance when he met my hon. Friend the Minister of State that the matter of the lead Department was with the Cabinet Office. The hon. Gentleman has written to the Prime Minister on that point, and sent copies to my hon. Friend the Minister of State and to other interested hon. Members.
Following inquiries, I am glad to be able to say that the hon. Gentleman will be given the information about the lead Department on those issues shortly—within the coming month—and he will also receive a reply from my right hon. Friend the Prime Minister. I hope that that will reassure him that, as well as taking Cornwall's general situation seriously in the way that I outlined at the beginning of my contribution, we are dealing with the specific issues that relate to the Cornish language.
I welcome the hon. Gentleman's comments. It is important to raise those issues and I am glad that interest has been shown—a number of hon. Members have attended the debate. I hope that he will feel that, in spite of the frustrations of the past, we are making some progress on the issue.

Question put and agreed to.

Adjourned accordingly at four minutes to Eleven o'clock.